SABMiller, the world's second largest brewer, has promptly rejected an improved offer from bigger rival Anheuser-Busch InBev, saying that its 68 billion-pound ($104 billion) valuation was insufficient. But as Joel Flynn reports, some say a deal is still possible.
The world's largest brewer was hoping for third time lucky when it submitted its latest bid for SABMIller. Anheuser-Busch InBev certainly made it more attractive by upping the offer price. Many thought the 68 billion pound bid - that's 104 billion dollars - would go down well. (use drinking shot!). SOUNDBITE: World First Chief Economist, Jeremy Cook, saying (English): "I think SABMiller are trading at around 38 pounds at the moment and the offer is around 42 pounds, so it's a fair old premium that we're seeing for this company. I think it will go through, if it doesn't go through now then will it ever go through?" But just a few hours after World First's Jeremy Cook asked that question SAB appeared to reject the offer, saying it "substantially undervalued" a company with a "unique and unmatched footprint." SABMiller's strength in Africa is one of the key attractions. But combining two already massive companies was never going to be easy, says Mike Van Dulken from Accendo. SOUNDBITE: Accendo Markets Head of Research, Mike Van Dulken, saying (English): "It's a big tie-up and it would control a lot of the industry, and the regulators don't really like that, so there could be hurdles to overcome, as we've seen with BG Group and Shell in terms of big control of the oil and gas markets." The merger was seen as the end-game of a consolidation in brewing. The big four - which include Heineken and Carlsberg - currently brew half the world's beer. Together SABMiller and AB InBev would have had a third of the global beer market. Some analysts think a fourth bid is still possible as AB InBev still has a week before the offer window closes.