Belfast Telegraph

SABMiller board backs AB InBev's improved takeover offer

Budweiser brewer Anheuser-Busch InBev has cleared a major hurdle in its efforts to create a global drinks giant after the board of SABMiller backed its improved takeover offer.

The SABMiller board has recommended shareholders accept the Belgian brewer's all-cash offer of £45 a share , up from its earlier price of £44, valuing the London-listed firm at around £79 billion.

AB InBev tabled the fresh deal in light of the collapse in the value of the pound following Britain's vote to leave the European Union.

The pound has plunged in value versus the dollar since the June 23 vote, falling more than 10% to 1.31 US dollars.

But SABMiller said it had not confirmed a date for shareholders to vote on the tie-up.

The announcement comes after AB InBev's takeover pursuit was given a boost earlier in the day when it won regulatory backing in China.

Jan du Plessis, chairman of SABMiller, said it was a hard decision to take, but it was the right move for the company.

He said the fall in the value of sterling following the Brexit vote had made the " board's decision more challenging" and that the final cash consideration of £45 per share was "at the lower end of the range of values considered recommendable".

But he added: "Now that the regulatory pre-conditions are satisfied, the board and management will continue to work constructively with AB InBev to bring about successful completion of the transaction as soon as practicable."

The SABMiller board said it had proposed that shareholders should be allowed to vote separately from investors Altria and BEVCO.

Concerns about the deal have been raised by a string of investors, such as Elliott Management and Aberdeen Asset Management, but other shareholders, including New York-based investment management firm Twin Capital Management, want the takeover to go through.

The board's recommendation comes as the deal was given the green light by China's Ministry of Commerce after AB InBev agreed to sell SABMiller's 49% stake in China Resources Snow Breweries to China Resources Beer.

It means the firm's swoop has now been approved in 23 jurisdictions worldwide, satisfying all pre-conditions of the deal.

The Belgian firm said it is still aiming to complete the mega-merger by the end of this year.

AB InBev reported a 4.3% rise in operating profits for the second quarter to 4.01 billion US dollars (£3.04 billion) following strong sales of Budweiser, Corona and Stella Artois.

It said the three brands saw revenue growth of 8.4% over the period, with Corona alone notching up a 13% rise compared to the second quarter of last year.

AB InBev, the world's largest brewer, has already moved to sell SABMiller's Peroni, Grolsch and Meantime brands to Japanese firm Asahi. It has also signalled its intent to sell SABMiller's businesses in central and eastern Europe.

SAB employs around 69,000 people in more than 80 countries and has global annual sales of more than 26 billion US dollars (£19.6 billion).