SABMiller Agrees Terms For Takeover By AB InBev

British brewer SABMiller has announced it has agreed a take over by Anheuser-Busch InBev.

: Tim Dobson / Foter / CC BY

Belgian giant AB Inbev is the world’s largest brewer and the deal is expected to be about $109 billion ($117 billion including debt).

AB InBev makes Budweiser and Stella Artois.

The deal is the third largest mega-merger in history. A firm offer has to be made by 28 October. The boards of both companies expect the deal to go through in spite of regulatory hurdles.

The new company will mean AB InBev will produce a third of the world’s beer. Some analysts say it might be forced to sell off some assets. In the United States for example when AB and SABMiller control 70% of the market, we could see a situation where the 58% shareholding the latter has in MillerCoors being sold off due to competition regulations in the country.

AB InBev will change the corporate culture with a less decentralised system favoured by the former and since deceased former Chief Executive of SABMiller Graham Mackay.

As for Zimbabwe, we expect the effect to be trickle-down really. SABMiller owns 38% of Delta’s issued share capital.

AB is a highly profitable company but is often keen on cost-cutting measures where it finds them necessary.