Brewing giant lifts SABMiller bid to €92bn

Anheuser-Busch InBev, the world’s largest brewer, launched an improved bid for SABMiller yesterday, offering just over £68bn (€92bn) for its largest rival to extend its reach into Africa and other markets.

The company said in a statement it would pay £42.15 in cash per SABMiller share, having already made two prior offers at £38 and £40.

Anheuser-Busch InBev said it believed the offer would be attractive to Sabmiller shareholders, adding it was disappointed the UK-based company’s board had rejected both previous approaches.

In reaction SABMiller said its board would meet to consider the latest proposal as soon as it could but said it noted the cash offer is only 15p a share higher than an informal £42 proposal made “and rejected” at a meeting on Monday.

Anheuser-Busch InBev is also offering an alternative to the cash offer.

It said it expected that most SABMiller shareholders would accept the all-cash offer and could re-invest their proceeds in its listed ordinary shares if they wanted to maintain a holding.

Top shareholder Altria, the tobacco group which has 26.5% of SABMiller, promptly said it supported the bid and would be prepared to opt for the share alternative.

If the bid is successful the merged group would be a brewing colossus making nearly a third of all beer consumed worldwide, with analysts seeing it as the end-game for the industry’s consolidation as the big four, AB InBev, SABMiller, Heineken and Carlsberg already brew over half of the world’s beer.

It would add Africa and certain Latin American and Asian breweries to Anheuser-Busch InBev’s extensive presence in the Americas and add SABMiller’s Peroni, Grolsch, Pilsner Urquell and other international brands to Anheuser-Busch InBev’s existing line-up which includes Budweiser, Stella Artois and Corona.

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.

In western Europe and north America beer volumes have steadily declined in the past two decades and US consumers in particular have shifted to craft brews made by independent players.