LEUVEN, Belgium and LONDON -- Anheuser-Busch InBev now has until Nov. 4 to make a formal offer to purchase SABMiller after London's Panel on Takeovers and Mergers approved a last-minute request for a deadline extension to allow both parties to continue negotiations.
One sticking point, however, is what will happen to SABMiller's share of MillerCoors LLC, the beer brewer's joint marketing partnership in the United States with Molson Coors Brewing.
The two companies have been working to come to an agreement on the sale of SABMiller’s 58% stake in MillerCoors, according to a Wall Street Journal report, aiming to diffuse a major regulatory concern—owning too much of the U.S. beer market—before it can become an issue.
“There are ongoing attempts to see if the MillerCoors deal can be done quickly,” a source told the newspaper. While AB InBev won’t hold up announcing a formal offer until an agreement to sell SABMiller’s stake in the U.S. joint venture is in place, the source said, the parties would like to announce such a deal when, or soon after, AB InBev announces its formal offer to buy SABMiller.
Some reports suggest Molson Coors could take over the whole of MillerCoors, which would make Miller Brewing legacy brands such as Miller Lite, Miller High Life and Blue Moon part of Molson Coors' portfolio.
In the larger deal, AB InBev and SABMiller reached a tentative agreement earlier this month after weeks of haggling over the price, a process that began Sept. 14.
Under the terms of the possible offer, SABMiller shareholders would be entitled to receive £44 ($67.08 U.S.) per share in cash, with a partial share alternative (some cash, some investment in the new company) available for approximately 41% of the SABMiller shares.
AB InBev announced today that it has lined up financing for the $106 billion deal to make the proposed acquisition, while SABMiller is said to still be discussing the financial terms with its shareholders.
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