Anheuser-Busch InBev explores takeover of rival SABMiller

Anheuser-Busch InBev, the world's largest brewer, is exploring a takeover of rival SABMiller in a deal that would create a $275 billion company responsible for one out of every three beers produced globally.

A tie-up between the owner of Budweiser and Stella Artois and the group behind Grolsch would rank as one of the six largest takeovers in history and the biggest in a year that was already the strongest for blockbuster deals since 2007.

It would mark the latest stage of a remarkable consolidation in the global brewing industry driven by a group of Brazilian investors led by Jorge Paulo Lemann. They are also the founders of 3G Capital, which has been buying up US food companies including Heinz, Kraft and Burger King, sometimes with the support of serial investor Warren Buffett.

A series of deals over the past decade has transformed AB InBev and SAB into the world's two biggest brewers. Along with Heineken and Carlsberg they make half the world's beer.

The industry has consolidated just as consumer tastes in beer are fragmenting, with the big brewers facing a growing challenge from craft beer.

SABMiller said yesterday it had been informed AB InBev intended to make a bid proposal for the company but it had not received any such proposal or details about its terms.

“The board of SABMiller will review and respond as appropriate to any proposal which might be made,” it said.

Offer deadline

Under rules guiding takeovers in the UK, AB InBev has until 5pm on October 14th to make a firm offer to SABMiller.

AB InBev later confirmed it had made an approach, saying its intention was “to work with SABMiller’s board toward a recommended transaction”.

Shares in SABMiller closed up 20 per cent to £36.14 in London, giving it a market capitalisation of €80.3 billion. AB InBev shares closed up 6 per cent at €100.5, giving a market capitalisation of €161.6 billion. – Copyright The Financial Times Limited 2015