AB InBev makes formal offer for SABMiller

Anheuser-Busch InBev has announced a revised proposal today to SABMiller to merge the two companies “and build the first truly global beer company”.

The proposal offers £42.15 per share in cash with a partial share alternative available for approximately 41% of SABMiller’s shares.

This places an overall value of £68.2 billion on the deal.

AB InBev has made two prior written proposals in private, the first offering £38 per share and the second £40 per share in cash.

“AB InBev is disappointed that the Board of SABMiller has rejected both of these prior approaches without any meaningful engagement,” stated AB InBev.

The cash proposal represents a premium of approximately 44% to SABMiller’s closing share price of £29.34 on 14th September, stated the company.

“The combination of AB InBev and SABMiller would result in a truly global brewer that would take its place as one of the world’s leading consumer products companies,” AB InBev stated, “Given the largely complementary geographical footprints and brand portfolios of AB InBev and SABMiller, the combined group would have operations in virtually every major beer market including key emerging regions with strong growth prospects such as Africa, Asia and Central and South America.”

Together, the group would generate revenues of $64 billion with synergies in distribution networks coupled with their strong brand-building experience and success in developing national icons and local brands.

AB InBev believes that key members of SABMiller’s management team and employees would play a significant role in the combined company across the organisation.

However SABMiller is likely to reject the proposed takeover once again since it described the second proposal of £40 per share as “substantially” undervaluing the company in a subsequent statement released today.

“It should be noted that the all-cash offer within the new proposal announced today is only £0.15 higher than the £42 proposal considered and rejected on 5 October,” it stated, “The board will, of course, meet formally to consider the £42.15 proposal as soon as practicable and a further announcement will be made thereafter.”

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