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 The company said in a statement it would pay 42.15 pounds in cash
per SABMiller share, having already made two prior offers at 38 and
40 pounds.
AB InBev said it believed the offer would be attractive to SABMiller
shareholders, adding it was disappointed the UK-based company's
board had rejected both previous approaches.
In reaction SABMiller said its board would meet to consider the
latest proposal as soon as it could but said it noted the cash offer
is only 15 pence a share higher than an informal 42-pound proposal
made "and rejected" at a meeting on Monday.
SABMiller Chairman Jan du Plessis described his company as "the
crown jewel of the global brewing industry".
"AB InBev needs SABMiller but has made opportunistic and highly
conditional proposals, elements of which have been deliberately
designed to be unattractive to many of our shareholders. AB InBev is
very substantially undervaluing SABMiller," he said.
 SABMiller shares were up 1.3 percent at 36.68 pounds by 0427 EDT,
when AB InBev's were 1.4 percent higher at 99.45 euros.
AB InBev is also offering an alternative to the cash offer of
partial payment in shares, limited to about 41 percent of SABMiller
stock and expected to be taken up by the British brewer's major
shareholders Altria <MO.N> and the Santo Domingo family, who
together own 40.6 percent of the company, according to Thomson
Reuters data.
Under this offer shareholders would get 2.37 pounds a share in cash
plus 0.48 special unlisted AB InBev shares which are convertible
into ordinary AB InBev stock after a five-year lock-up period.
Assuming AB InBev does pay for 41 percent of SABMiller with this
partial unlisted shares and cash offer alternative (PUSCA),
SABMiller said this would imply an overall price tag of just 65
billion pounds, based on AB InBev's closing share price on Tuesday.
AB InBev said it expected most SABMiller shareholders would accept
the all-cash offer and could re-invest their proceeds in its listed
ordinary shares if they wanted to maintain a holding.
Top shareholder Altria, the tobacco group which has 26.56 percent of
SABMiller, promptly said it supported the bid and would be prepared
to opt for the share alternative.
AB InBev's chief executive, Carlos Brito, told a conference call
that he also expected support from the Santo Domingo family, which
holds a 13.9 percent stake through their company BevCo.
AFRICA THE PRIZE
If the bid is successful the merged group would be a brewing
colossus making nearly a third of all beer consumed worldwide, with
analysts seeing it as the end-game for the industry's consolidation
as the big four - AB InBev, SABMiller, Heineken <HEIN.AS> and
Carlsberg <CARLb.CO> already brew over half of the world's beer.
[to top of second column] |
It would add Africa and certain Latin American and Asian breweries
to AB InBev's extensive presence across the Americas and add
SABMiller's Peroni, Grolsch, Pilsner Urquell and other international
brands to AB InBev's existing line-up which includes Budweiser,
Stella Artois and Corona.
Africa is expected to see a sharp jump in the legal drinking age
population in the years ahead as well as increased beer consumption
among a fast-growing middle class. In western Europe and North
America beer volumes have steadily declined in the past two decades
and U.S. consumers in particular have shifted to craft brews made by
independent players.
"We believe Africa in particular will be a key driver for the joint
company in the future," Brito said.
AB InBev also said it intended to establish a secondary share
listing and regional headquarters in Johannesburg.
The company, partly controlled by 3G Capital, a private equity fund
run by a group of Brazilian investors, has a strong track record for
takeovers and keen cost-cutting thereafter but Brito declined to say
what potential synergies a SABMiller deal might realize.
He did say, however, that he remained confident that the company
could put together financing for a bid. According to banking
sources, it has asked banks to underwrite $70 billion in debt.
Analysts see this merger as the end-game of consolidation in brewing
with the big four - AB InBev, SABMiller, Heineken <HEIN.AS> and
Carlsberg <CARLb.CO> - already present across the globe and brewing
more than half of the world's beer.
($1 = 0.6546 pounds)
(Additional reporting by Robert-Jan Bartunek in Brussels, Aastha
Agnihotri in Bengaluru and Martinne Geller in London; Editing by
Gopakumar Warrier and Greg Mahlich)
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