Anheuser-Busch has approached rival SABMiller about a takeover that would form a brewing colossus which makes around a third of the beer consumed globally.
Belgium’s AB InBev, the world’s biggest brewer, makes Budweiser, Stella Artois and Corona.
British-based SABMiller, the No 2 player, owns Peroni, Grolsch and Pilsner Urquell beers.
A merged group would have a market value of around $275bn (€243.3bn), based on current prices, and would combine AB InBev’s dominance of Latin America with SABMiller’s strong presence in Africa, both fast-growing markets, as well as their breweries in Asia.
“The real attraction is Africa, where AB InBev has no presence, as well as some add-ons in Asia and Latin America,” said Societe Generale beverage analyst Andrew Holland.
SABMiller said yesterday that AB InBev had informed it that it intended to make a proposal, but the UK-based firm added it did not have any further information about the terms.
“The board of SABMiller will review and respond as appropriate to any proposal which might be made,” it said.
AB InBev confirmed its approach to SABMiller’s board. “There can be no certainty this approach will result in an offer or agreement, or as to the terms,” it said.
AB InBev will have to pay at least £40 per SAB Miller share, and maybe £45, according to analysts, implying an overall price of up to $130bn, including SABMiller’s debt.
AB InBev’s global beer market share was 21.1% in 2014 and SABMiller’s 15%, according to industry experts Plato Logic.
AB InBev has targeted a net-debt-to-core-profit ratio of two times, from around two and a half currently.
It is likely to reach that by 2016, the earliest any deal could realistically be completed, and so has room to borrow to fund a takeover.
When it bought Budweiser-maker Anheuser-Busch in 2008, it allowed the ratio to rise to beyond five times.
If it was prepared to go that high again, it might be able to raise up to $100bn in debt.
AB InBev’s controlling families own just over half of the company, while SABMiller’s two top shareholders are cigarette maker Altria and the Santo Domingo family of Colombia.
If SABMiller chooses not to be bought it could seek a combination with another brewer.
However, its approach last year to family-controlled Heineken, the world’s No 3 player, was rebuffed.
Speculation of such a mega-merger has often surfaced in a global market increasingly dominated by big multinationals.
AB InBev has proved the most active player, with its aggressive cost-cutting and expansion bringing beers such as Budweiser to a global audience.
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