A-B InBev & SABMiller Reach Tentative Merger Deal
LONDON — After weeks of talks and offers, Anheuser-Busch InBev and SABMiller have agreed in principal to merge the world's two largest beer companies.
SABMiller's board of directors agreed on the key terms of A-B InBev's latest offer, valuing the deal at $104 billion, according to CNNMoney.com.
Under the deal, A-B InBev will offer most SABMiller shareholders $67.59 per share. The two biggest shareholders, including U.S. tobacco company Altria, will have to opt for a cash and shares alternative $60 a share, the news outlet reported.
Altria threw its support behind A-B InBev's attempts at a merger with SABMiller last week.
The merging companies described the tentative agreement, which must be approved by regulators, as a "possible deal." SABMiller's board members have indicated they will recommend the offer to shareholders. If the deal falls apart, AB InBev will pay a $3-billion penalty to SABMiller.
SABMiller's board has asked for a two-week extension to the U.K.-imposed deadline, set for Wednesday, for a formal bid to be made. The new deadline is Oct. 28, according to media reports.
If completed, this would be the biggest beer deal ever and among the top five acquisitions of all time, according to CNNMoney.
The deal is likely to fall under the close eye of antitrust regulators, mainly because the mega beer company would have too much power in key markets worldwide, resulting in higher beer prices.
In order to get the merger past the U.S. Department of Justice, the firms could be forced to sell some of their assets in the country, including SABMiller's stake in the MillerCoors joint venture, according to the report.