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SABMiller Quickly Rejects ABI’s $104 Billion Bid, But Top Shareholder Altria Open To Deal

October 7, 2015

Apparently, the third time wasn’t a charm for Anheuser-Busch InBev (ABI). Just hours after ABI made a $104 billion cash offer for archrival SABMiller, SABMiller formally rejected the bid, saying it “seriously undervalues” the company.

ABI’s £42.15 ($64.49) per share bid was the brewing giant’s third offer in recent weeks for SABMiller, which rejected the first two attempts: a £38 ($58.14) per share bid made on September 17, and a £40 ($61.20) per share play made on September 22. Along with the cash offer, ABI—the world’s biggest brewer—made an alternative partial-stock-and-cash bid, but that proposal appears even less palatable to SABMiller, because it values the world’s second-biggest brewer at little more than £40 per share.

While SABMiller rejected the latest offer, its largest shareholder, Altria (which controls 27% of the London-based brewer), issued a statement this morning saying it approves of a bid price of £42.15 per share or more, suggesting that a deal may still be in the offing. Today’s offer was actually lower than what many analysts had been predicting. It was widely expected that ABI’s latest bid price would be around £45 ($68.85) per share.

Meanwhile, SABMiller—the world’s second-leading brewer—posted a 4% organic increase in net revenue for the six months through September, representing its fiscal first half. Its MillerCoors joint venture with Molson Coors—which it would likely have to relinquish if acquired by ABI—posted sales to retailers down 3% for the first half, owing mainly to declines in its sub-premium portfolio.


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