LONDON -- The London Panel on Takeovers and Mergers has approved a third deadline extension to allow Anheuser-Busch InBev and SABMiller to get their ducks in a row on an official deal for the Belgium-based beer brewer, the largest in the world, to purchase SABMiller.
AB InBev now has through Nov. 11 to make an official offer to purchase the No. 2, London-based beer company.
Since Oct. 28, when the second extension to Nov. 4 was requested, "SABMiller and AB InBev have made good progress in agreeing the terms of the possible offer," AB InBev announced this morning. An official acquisition proposal, if and when it comes, "will be set out in detail in any announcement of a firm intention to make an offer."
In the meantime, AB InBev has completed its due diligence review of SABMiller, reconfirmed the financial and other terms of the possible offer and confirmed that the facilities that will allow AB InBev the funds in support of the cash components of the possible offer had been negotiated and could be executed at short notice.
Under the terms of the possible offer, SABMiller shareholders would be entitled to receive £44 ($67.08 U.S.) per share in cash, with a partial share alternative (some cash, some investment in the new company) available for approximately 41% of the SABMiller shares, making the deal total between $104 billion and $106 billion. AB InBev first expressed interest in bidding for SABMiller in mid-September. An initial panel deadline of Oct. 14 to make an official proposal has now been extended three times.
The latest extension highlights the complexity of the deal that would create a beer giant with a 28.4% share of the global beer market, according to industry tracker Plato Logic. It also illustrates AB InBev’s interest in announcing a deal only after having a solution to regulatory concerns in the U.S., where it has a 45% market share and SABMiller’s joint venture MillerCoors LLC has a 25% share, according to a Wall Street Journal report.
Meanwhile, AB InBev is in talks to sell—should the acquisition go through—SABMiller’s stake in MillerCoors to its joint-venture partner Molson Coors Brewing Co., according to reports. Molson Coors currently owns 42% of MillerCoors. As part of the joint-venture agreement, Molson Coors has a first right of refusal to buy MillerCoors and an option to top another offer by 5%.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.