AB InBev To Become Global Brewer By Acquiring SABMiller In $107 Bln Deal

(RTTNews) - Beer giant Anheuser-Busch InBev SA/NV (BUD, AHBIF.PK) Wednesday formalized the offer to acquire SABMiller plc (SBMRY.PK, SAB.L) in a deal worth 71 billion pounds or about $107 billion. In a related deal, in order to avoid antitrust fears, SABMiller has agreed to sell its 58 percent stake in its joint venture with MillerCoors to Molson Coors Brewing Co. (TAP-A, TAP) for $12 billion in cash.

AB InBev said the combined group will be a truly global brewer, with operations in virtually every major beer market. The acquisition would strengthen its growth prospects in Asia, Central and South America, and Africa.

The acquisition will be completed through Newco, a Belgian company to be formed for the purposes of the transaction. AB InBev will eventually merge into Newco and it will hold the combined group. The deal will be closed in the second half of 2016.

The offer was made in mid October and the U.K. regulators have granted Belgian brewer permission to make a formal takeover offer to the British brewer by end of the month.

As per the agreement, SABMiller Shareholder will get 44 pounds in cash that represents a premium of approximately 50 percent to its closing share price of 29.34 pounds on September 14, 2015.

The agreement has a provision for Partial Share Alternative for SABMiller shareholders to elect to receive 3.7788 pounds in cash and 0.483969 restricted shares in lieu of full cash consideration. The Partial Share Alternative is equivalent to a value of 41.85 pounds per SABMiller share on 10 November 2015.

The restricted shares will be unlisted and will not be admitted to trading on any stock exchange.

The new ordinary shares would be listed on Euronext Brussels, JSE and Mexico Stock Exchange. The American Depositary Shares will be listed on the New York Stock Exchange or NYSE.

AB InBev chief executive officer Carlos Brito said, "We believe this combination will generate significant growth opportunities and create enhanced value to the benefit of all stakeholders. By pooling our resources, we would build one of the world's leading consumer products companies, benefitting from the experience, commitment and drive of our combined global talent base."

Jan du Plessis, chairman of SABMiller that the AB InBev's offer represents an attractive premium and cash return for its shareholders.

In a separate announcement, Altria Group, Inc. (MO) revealed its support to AB InBev-SABMiller combination. Altria owns around 27 percent of SABMiller's shares. outstanding. On closing of the deal, Altria will get around 10.5 percent stake in the new, combined company and approximately $2.5 billion in cash, subject to pro-ration. Further, it looks ahead for two seats in the new board.

According to reports, AB InBev would avail a loan of $75 billion for the acquisition and would sell bonds to raise cash.