A few weeks ago, the rumor mill started churning with news that Anheuser-Busch InBev would finally be making an official bid to acquire its top rival (and #2 brewing company in the world) SABMiller. Soon after, AB InBev made a series of official proposals—and SABMiller has turned them down.
AB InBev started out with an initial offer of £38 (roughly $58.40 USD) per share of SABMiller, followed by an offer of £40 ($61.46 USD). AB InBev’s third proposal offered SABMiller shareholders £42.15 ($64.74 USD) in cash for shares, a bid valued at $104 billion. But after meeting formally to discuss, SABMiller’s Board of Directors (minus three directors nominated by the company’s largest stakeholder Altria Group) unanimously rejected this most recent bid on the grounds that it still undervalues all that SABMiller has to offer.
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While AB InBev referred to its latest bid as “compelling” and “attractive,” Brewbound reports that SABMiller did not find the conditions and valuation of the bid arresting enough to pursue further:
“SABMiller is the crown jewel of the global brewing industry, uniquely positioned to continue to generate decades of standalone future volume and value growth for all SABMiller shareholders from highly attractive markets,” Jan du Plessis, Chairman of SABMiller said in a statement. “A-B InBev needs SABMiller but has made opportunistic and highly conditional proposals, elements of which have been deliberately designed to be unattractive to many of our shareholders. A-B InBev is very substantially undervaluing SABMiller.”
Will AB InBev come back from this in short order with an even higher and more mutually beneficial bid to win over Altria shareholders? Or will this be the end of the story (at least for now)? Stay tuned to find out.
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