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ABI Bids For SABMiller In Beer Megadeal, But Regulatory Hurdles Loom In U.S., China

September 16, 2015

Anheuser-Busch InBev (ABI) launched a bid for rival brewer SABMiller earlier today. While the union of the world’s two biggest brewers would create a colossus with a global market share as high as 35%, according to Impact Databank, the megadeal would likely have relatively little impact in the U.S. market, as antitrust concerns would prevent a merging of operations in the world’s second-largest beer market.

Even though both brewing giants have seen their shares shrink in the U.S. amid the craft beer boom, they still collectively dominate the market. ABI, led by the Budweiser franchise, controls just under half of the U.S. beer market, while MillerCoors—a joint venture between SABMiller and Molson Coors—accounts for more than 25%.

SABMiller has a 58% stake in MillerCoors, while Molson Coors owns the remaining 42%. If the ABI-SABMiller deal comes to fruition, the most likely scenario would involve Molson Coors—the world’s 7th largest brewer—buying out SABMiller’s interest in the venture.

The two brewers would also probably encounter regulatory issues in China, the world’s biggest beer market, as SABMiller owns a 49% stake in top brewer CR Snow, and ABI is the third-leading player.

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