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Why the SABMiller and AB InBev deal will be the last major brewery deal

by , 03 November 2015

If the deal between SABMiller and AB InBev goes through, it's likely to be the last major deal the brewery industry will see.

For years, there's been a lot of speculation over when this deal would actually happen. The merger would see consolidation in the sector.

So why is this the last major deal in the sector? And what would the deal mean for the brewery sector?

Let's take a closer look…


SABMiller and AB InBev are a result of a number of mergers

 
SABMiller and AB InBev are both the result of mergers and consolidation over the years.
 
Take SABMiller. This company came about after South African Breweries bought Miller Brewing. Both of these companies bought out a number of smaller companies over the years prior to their merger.
 
It’s a similar story with AB InBev. This company came about from a number of deals merging Anheuser-Busch, AmBev and Interbrew.
 
The merger between SABMiller and AB InBev unites the world’s two largest breweries by revenue. And if the deal goes through, it’s the only easy merger left in the sector.
 
The world’s third largest brewer, Heineken is still family owned. It rejected a bid by SABMiller last year. 
 
The world’s fourth largest brewer Carlsberg is controlled by a foundation that have rebuffed offers in the past.
 
The current deal on the table for SABMiller by AB InBev values it as the third largest ever. 
 

What a merger of SABMiller and AB InBev means

 
The merged mega brewer would account for more than a third of beer sales in the world, Cris Sholto Heaton in Money Week explains. It would rank first or second in 24 of the 30 largest beer markets.
 
This is where there may be problems getting the necessary approvals from competition regulators.
 
The merged company would have such a control over the industry.
 
If the deal does get the necessary nods to go ahead, AB InBev is set to benefit from SABMiller’s reach in Africa and China, which will help offset its falling sales in Europe and North America.
 
If SABMiller and AB InBev manage to agree to a deal, it may yet be some time before the deal goes through.
 
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Why the SABMiller and AB InBev deal will be the last major brewery deal
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