Diageo and SABMiller merger rumoured

Diageo and SABMiller are enjoying a rise in their stock prices on the FTSE 100 amid rumours that the companies may merge.

stock+marketTrading news site Money Observer reports that the speculated merger – which would see the creation of a drinks group worth over £100 billion – could put to rest a rumoured bid by AB Inbev, who are said to be interested in using Diageo’s beer business as a strong route into the African market.

Diageo shares rose 1.2 per cent to 1,888p in early trading today (Tuesday 1 July) from 52-week low of 1,768p, while SAB was up 0.15 per cent to 3,394p from a 52-week low of 2,661p.

The combined businesses would generate annual free cash flow of around £5 billion, according to Barclays analysts. A deal would allow SAB to nip AB Inbev’s approach and access Diageo’s Guinness beer business which could produce cost savings of £430 million from using SAB’s global beer distribution network alone.

As the drinks business has reported previously, Diageo has also been building a stake in United Spirits for access to India, the world’s largest whisky market in terms of volume, in which it sees an opportunity to circumvent the country’s strict rules on imported goods.

If successful, United’s network would also allow Diageo to distribute its own beverages and high margin premium spirits, such as Johnnie Walker whisky and Smirnoff vodka.

India’s alcoholic beverage market is estimated to be worth upward of $16 billion (£9.34 billion) and growing.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Press Officer

Speciality Drinks
London, UK

UK Private Clients Manager

Ditton Wine Traders
London, UK

London Business Development Manager

Maisons Marques et Domaines UK Ltd

Head of Buying - Spirits

Enotria&Coe
West London, UK

Liquid Production Supervisor

ATOM Supplies
Tonbridge, Kent, UK

Sales Account Manager – Cotswolds

Haynes Hanson & Clark
Gloucestershire, UK

Communications & PR Manager

Bruichladdich
Islay, UK

Senior London Account Manager

The Drinks Club
London, UK

On-Trade London Sales Executive

Domaine Direct
London, UK

Trade Marketing Manager

Boisset, La Famille des Grands Vins
Either, within the M25/ Cheshire/ Southampton , UK

Vinisud

Montpellier,France
18th Feb 2018

International Bulk Wine and Spirits Show

London,United Kingdom
26th Feb 2018

Spirited London

London,United Kingdom
15th Mar 2018
Click to view more

The Global Malbec Masters 2017

the drinks business is proud to announce the inaugural Global Malbec Masters 2017

The Global Sparkling Masters 2017

the drinks business is thrilled to announce the launch of The Global Sparkling Masters.

Click to view more