Anheuser-Busch InBev submitted its formal offer to buy SABMiller for about $107 billion, ending a month of intense negotiations to seal the biggest deal in UK history.
The Budweiser maker will pay £44 pounds a share in cash for a majority of the stock, the companies said, confirming a price accord announced on 13 October. The deal will lead to annual pretax cost synergies of at least $1.4 billion, they said. To help gain antitrust approval, Molson Coors Brewing will acquire SABMiller’s 58 per cent stake in MillerCoors for $12 billion, giving it full control of a business that makes Coors Light.
The takeover of SABMiller will give AB InBev beer brands such as Peroni and Grolsch and create a company controlling of about half of the industry’s profit - provided it gets past antitrust regulators. The companies reached a tentative agreement last month after weeks of haggling over the price, and have since been hammering out a formal deal. The Belgian suitor must pay a fee of $3 billion if it fails to get the necessary approvals.
"We believe this combination will generate significant growth opportunities and create enhanced value to the benefit of all stakeholders," AB InBev Chief Executive Officer Carlos Brito (pictured) said in the statement.
SABMiller shares rose 1.5 per cent to 4,034 pence at 8.37am in London. The price of the cash offer is 50 per cent above the closing value on 14 September, the day before takeover speculation resurfaced. AB InBev gained 0.3 per cent to €111.5 euros in Brussels.
AB InBev will finance the cash part of the transaction from existing resources and third-party debt. It lined up seven banks to arrange as much as $70 billion in financing, people familiar with the matter have said.
The planned sale of the stake in MillerCoors is designed to "promptly and proactively address regulatory considerations," the companies said. MillerCoors represented the biggest antitrust hurdle to the merger, analysts have said, though SABMiller’s stake in China’s CR Snow may also need to be sold.
The merged company will be listed in Brussels, Mexico and Johannesburg.
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