Deadline extended on mega brewing deal

SABMiller beer: Miller, Peroni, Tyskie, Pilsner Urquell, Grolsch and Coors Light. Photo credit: David Jones/PA Wire
SABMiller beer: Miller, Peroni, Tyskie, Pilsner Urquell, Grolsch and Coors Light. Photo credit: David Jones/PA Wire
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Brewer SABMiller has extended the deadline for rival Anheuser-Busch InBev to make a formal $100bn-plus takeover offer by a further week in order to finalise shareholder support for the deal.

The two companies said in a joint statement that London’s Panel on Takeovers and Mergers had granted SABMiller’s request to push back the deadline to 5 p.m. on November 11.

Carlos Brito targeting the African market.

Carlos Brito targeting the African market.

The Takeover Panel has already granted a series of extensions since AB InBev and SABMiller said they had reached a preliminary agreement on a takeover on October 13.

Since then, AB InBev has completed a due diligence review of its target, reconfirmed the terms of its proposed offer and negotiated facilities to fund a takeover at short notice.

The two companies said that they had made good progress in agreeing terms and AB InBev had entered into the funding facilities, but still needed a further week to finalise discussions and satisfy pre-conditions.

Last week, chief financial officer Felipe Dutra said the extension was needed for lawyers to finalise documents related to shareholder support for the deal.

AB InBev is offering £44 per SABMiller share, along with a discounted alternative mostly of shares and designed for SABMiller’s two largest shareholders, cigarette-maker Altria and BevCo, the vehicle of Colombia’s Santo Domingo family, who together own 40.5 per cent of the target company.

The takeover currently worth $107bn would create a brewing colossus making about a third of all beer drunk and would be the largest of a British-based company and the fourth-biggest overall in corporate history.

AB InBev has a stable of more than 200 beers, including Corona, Beck’s, Leffe and Hoegaarden.

SAB has Miller, Foster’s, Coors and Bulmers cider. It employs around 69,000 people in more than 80 countries and has global annual sales of more than £17bn.

Its suitor and larger rival AB InBev, based in Leuven, Belgium, has a 155,000-strong global workforce and makes more than £30.5bn in global revenues.

SAB attempted to acquire Heineken a year ago but its advances were rebuffed.

If the deal is completed then the merged group would end up making nearly a third of all beer consumed worldwide.

It would add Africa and certain Latin American and Asian breweries to AB InBev’s extensive presence across the Americas. Carlos Brito, chief executive of AB InBev, said: “We believe Africa in particular will be a key driver for the joint company in the future.”

Africa is expected to see a sharp jump in the legal drinking age population in the years ahead as well as increased beer consumption among a fast-growing middle class.