The Dance of Billions in the Brewing Industry – Here is What AB InBev Offers SABMiller for Acquisition

The world’s largest beer producer, Anheuser-Busch InBev, increased its offer for its biggest competitor, SABMiller, from £40 to £42.15 per share in cash, bringing the value of the British company to nearly £68 billion or $103.6 billion.

AB InBev stated that it believes the new offer will be attractive to SABMiller’s shareholders and expressed disappointment that the British company rejected the previous two offers.

If the offer is accepted, it would be the largest acquisition of a British company in history and one of the most expensive in the world. The merger of these two companies would create a giant worth approximately $275 billion, given the current stock prices of the two beer producers, and the new mega company would have over 400 brands and produce a third of the world’s beer.

Last year, AB InBev’s share, which produces brands such as Budweiser, Stella Artois, Corona, and more than 200 other brands, accounted for 21.1 percent of the global beer market. SABMiller, producer of brands such as Peroni, Grolsch, and Pilsner Urquell, held 15 percent of the market.

If an agreement is reached to merge these two companies, regulators in some countries, such as the USA and China, will need to consider whether this would create a monopoly in those markets.

For many analysts, this acquisition would signify the end of consolidation in the industry, as the big four companies AB InBev, SABMiller, Heineken, and Carlsberg are already present worldwide and produce more than half of the beer in the world.