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SABMiller shares soar as the brewer accepts AB InBev's latest offer,

by , 13 October 2015

After a number of failed offers, Anheuser-Busch InBev has made a successful bid for SABMiller.

Shares in SABMiller have soared on the news.

Let's take a closer look at the new deal…


AB InBev’s new offer is worth £44 a share


AB InBev is buying SABMiller [JSE:SAB] for around £68 billion (R1.4 trillion), reports IOL. The resulting company will produce around a third of the world’s beer.

This translates into an offer of £44 a share, says BDLive. This is 50% higher than the share price of SABMiller on 14 September, “the day before speculation of a deal surfaced”.

Bevco and Altria, the two biggest shareholders of SABMiller with a 41% stake, will “receive cash and stock valued at £39.03 per share,” adds BDLive. They won’t “be able to sell the shares for five years”.

AB InBev has raised its offer several times to clinch a deal, notes the BBC. SABMiller rejected “previous offers of £38, £40, £42.15 and £43.50 per share” as they “undervalued the company”.


News of the deal sent shares in SABMiller higher


On the JSE, shares traded as much as 11% higher and in London shares were up over 9%, says Fin24.

Alicia Forry, an analyst with Canaccord Genuity, said they believe the offer “is good value for SAB,” adds IOL. They expect AB InBev now “to make a firm offer”.

SABMiller’s board will now recommend shareholders accept the deal, notes BDLive. AB InBev had until 5pm tomorrow to “make a formal offer,” so the companies have requested an extension of two weeks to allow “time to formalise the agreement”.

The deal will bring together SABMiller’s 70,000 strong workforce with AB InBev’s 155,000 workers, says the BBC. SABMiller currently has annual sales of in excess of $26 billion, adding to AB InBev’s $47.1 billion.

At time of writing, shares in SABMiller were trading 10.32% higher at R807.53.

So after a few weeks of trying to takeover SABMiller it looks like AB InBev has finally succeeded.

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SABMiller shares soar as the brewer accepts AB InBev's latest offer,
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