Swiss banking firm UBS turned a few heads in the drinks industry recently by suggesting that the global brewing giants AB InBev and SABMiller might at some point merge to create SAB-InBev.
Melissa Earlam at the bank thinks AB InBev, the Belgian-Brazilian brewer behind the likes of Budweiser and Corona, will struggle to grow sales next year due to tough comparatives. She thinks the best way to tackle this problem is to get out its hefty chequebook and pay for growth.
Earlam tips Peroni and Grolsch brewer SABMiller as the most likely target for a deal, in a merger that would see the world’s largest brewers combine. Earlam thinks “SAB-InBev” could unlock $1 billion of savings and quotes a likely price of £39 a share for SABMiller.
Such a merger in the industry would see Budweiser, Stella Artois, Peroni and Fosters all under the one brewer.
Both Anheuser-Busch InBev and SABMiller are as it stands, the products of large mergers themselves. AB InBev is a Belgian-Brazilian joint effort, while SABMiller is based in London but own Peroni, Fosters and other international brands.
