Anheuser-Busch InBev SA (ADR) (NYSE:BUD), the second largest brewer worldwide is negotiating with banks to seek financing to acquire SABMiller plc (LON:SAB) according to report from the Wall Street Journal based on information from a person familiar with the situation.
Anheuser-Busch InBev – SABMiller deal: Potential acquisition price
The report indicated that an acquisition deal between Anheuser-Busch InBev SA (ADR) (NYSE:BUD) and SABMiller plc (LON:SAB) may be around £75 billion ($122 billion). There had been speculations regarding a potential merger between the two largest brewing companies for years.
Currently, Anheuser-Busch InBev SA (ADR) (NYSE:BUD) is not engages in active negotiations with SABMiller plc (LON:SAB) regarding a merger deal because it is still arranging its financing before making a formal approach, according to the source.
SABMIller vulnerable to a takeover
A separate report from Bloomberg indicated that SABMiller plc (LON:SAB) became more vulnerable to a takeover after failing to strike a merger deal with Heineken N.V. (ADR) (OTCMKTS:HINKY). SABMiller could ward off any potential takeover if it reached a merger agreement with Heineken.
SABMiller plc (LON:SAB) is evaluating its next move after Heiken N.V. (ADR) (OTCMKTS:HINKY) rejected its proposal, according to people familiar with the situation. They believed that the London-based brewing company is considering on submitting another proposal to Heineken.
Eddy Hargreave, an analyst at Cannacord Genuity, commented in a note to investors that “SABMiller’s inorganic options have been so publicly lessened puts ABI in an even stronger position, should it choose to make a move on SABMiller. He added that the shareholders of SABMiller are more likely to welcome a bid.
On the other hand, Jonathan Fyfe analyst at Mirabaud Securities said SABMiller plc (LON:SAB) could still partner with other brewing companies such as Carlsberg given the fact that its management seemed very serious about defending itself, which adds credibility to the story that Anheuser-Busch InBev SA (ADR) (NYSE:BUD) is going to buy SABMiller.
Early this year, Anheuser-Busch InBev SA (ADR) (NYSE:BUD) entered a deal to acquire Oriental Brewery for $5.8 billion to expand its market share in Asia. Last year, the company completed its acquisition deal with Grupo Modelo SAB de CV (PINK:GPMCF) for $20.1 billion.