LONDON & ST. LOUIS -- With the clock ticking on how long it has to place a formal bid for its biggest rival, Anheuser-Busch InBev is expected to submit an official offer to purchase SABMiller this week.
By British law, a company that has acknowledged plans to buy a company has one month to make an official offer. With AB InBev's period set to expire Oct. 14, a bid is expected before the end of the week, according to multiple reports. A Bloomberg report (see video below) suggests the two companies are quietly negotiating a deal as SABMiller does not want to be part of a hostile takeover attempt and AB InBev is drumming up the necessary cash.
When the news broke in mid-September that AB InBev was planning to make an offer, analysts said initial talks set the price at 40 British pounds per share (about $60 U.S.). Now AB InBev is expected to increase its bid to 45 pounds (or about $68 per share U.S.), placing the deal at about $106 billion (U.S.).
SABMiller has said it will review and respond as appropriate to any proposal that is made, while AB InBev confirmed its intention "to work with SABMiller’s board toward ... a combination of the two companies.”
A sell off of beer brands, particularly in the United States, would likely be necessary to gain regulatory support for the proposed merger.
Last week, Anheuser-Busch InBev was trying to get backing for about $70 billion in debt financing to fund its potential takeover of SABMiller, banking sources told The St. Louis Post Dispatch.
SABMiller plc is a multinational brewing and beverage company based in London. Its beers include Miller Lite, Peroni and Pilsner Urquel.
Anheuser-Busch InBev is a multinational beverage and brewing company based in Leuven, Belgium. Its beers include Budweiser, Michelob, Corona, Stella Artois, Hoegaarden and Skol.
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