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Brewing Giants Announce Merger Deal 'In Principle'

  • VOA News

FILE - A man walks past the AB InBev logo in Leuven, Belgium.

FILE - A man walks past the AB InBev logo in Leuven, Belgium.

The world’s two largest brewers have agreed “in principle” on a $106 billion merger that will combine longtime American brewers, Anheuser Busch and Miller, among many other global brands.

Miller’s parent company, the British-owned SABMiller, said it would combine with Belgian-Brazilian Anheuser Busch InBev, or AB InBev, to create a company that controls around 31 percent of the global beer market.

To put that in perspective, the next largest beer company, Heineken, controls 9 percent of the market.

It was the sixth time AB InBev had made an offer for SABMiller in the past weeks.

AB InBev has until October 28 to present a formal offer that values each SABMiller share at $67.

Because of the size of the merger, regulators in the United States and China may raise concerns about the impact on consumer choice.

Early trading in London saw shares of SABMiller jump by nearly 9 percent, a sign traders believe the deal will go through, analysts said.

The combined company would be worth around $73.3 billion, according to analysts.

AB InBev owns six of the largest global brewers. In addition to Budweiser, it controls Stella Artois and Beck’s.

SABMiller boasts Miller Genuine Draft as well as Peroni and Milwaukee’s Best.

Analysts say the deal would offer AB InBev more access to African and Australian markets.

A merger among these two brewing giants would be a continuation of market consolidation in the beer industry, which has been gaining momentum for the past decade.