AB Inbev makes £68bn offer for SABMiller

AB Inbev is confident that its £68bn offer to buy SABMiller at £42.15 per share – its third after offers of £38 and £40 were rejected – will be accepted by the smaller brewer.

AB Inbev CEO Carlos Brito is calling the deal a chance to make “the first truly global beer company” (Photo: ABInbev)

SEE UPDATE BELOW

The proposal is worth 44% more per share than SABMiller’s closing price on 14 September, the last day of share trading before speculation over an AB Inbev takeover was made public.

“AB Inbev believes that this revised proposal should be highly attractive to SABMiller shareholders and provides an extremely compelling opportunity for them,” the Belgian company said.

As a combined company, the group would generate revenues of US$64 billion (£42bn) per year, and earnings before tax and deductions of $24bn (£15.7bn).

AB Inbev is marketing a deal as the creation of a “global” beer brewer. Carlos Brito, CEO of AB Inbev, said: “We have the highest respect for SABMiller, its employees and its leadership, and believe that a combination of our two great companies would build the first truly global beer company.”

London-based SABMiller yesterday brought forward the release of its half-year results because of the AB Inbev negotiations. They showed organic growth in group revenue of 6%, but reported growth shrunk by 9% when factoring in currency fluctuations.

Alan Clarke, SABMiller CEO, said: “While adverse currency movements have materially impacted our reported results, we have a strong business with exceptional long term prospects.”

UPDATE: 07/10/2015: SABMiller has rejected the offer of £42.15 per share. The board, excluding the directors nominated by its main shareholder, the Altria Group Inc., “unanimously” rejected the proposal as it “still very substantially undervalues SABMiller, its unique and unmatched footprint, and its standalone prospects,” the company said.