SABMiller accepts a takeover proposal at the fifth time of asking after Anheuser-Busch InBev, the world's largest brewer, set out a cash-and-share package currently worth 69 billion pounds ($106 billion). As Ivor Bennett reports, the new deal ranks in the top five mergers in corporate history and is the largest takeover of a UK company.
A glass half-full or half-empty? SABMiller have certainly taken their time to decide. but finally the makers of Blue Moon think they've got a good deal. Accepting an offer from rival Anheuser Busch InBev at the fifth time of asking. At 69 billion pounds or 103 billion dollars, the merger would be the biggest in UK history and fifth on the all-time list. But even though SAB's board's initially said yes, IG's Alastair McCaig says it's not a done deal yet. SOUNDBITE (English) ALASTAIR MCCAIG, MARKET ANALYST, IG, SAYING: "I think the market share action is maybe highlighting the fact that the city hasn't completely believed that this has gone through. There's a 10 percent premium yet between the current market price - sub 40 pounds - and the 44 pounds takeover deal." The gap's even bigger compared to when the speculation first started. The 44 pounds a share offer a full 50 percent more than what SAB's shares were a month ago. SOUNDBITE (English) ALASTAIR MCCAIG, MARKET ANALYST, IG, SAYING: "They are paying a lot of money, but at this point of time we look at interest rates likely to turn in the next 12 months or so and i think this is arguably the time to start using cash funds and move into the M&A arena." Better still, it opens up new markets. though it was already the world's largest brewer, AB InBev's never before had a presence in Africa. Something SAB does. and now together, they'll make nearly a third of the world's beers. Such a prospect will no doubt have regulatory hurdles to clear and it still needs the backing of AB InBev's board. but it seems investors have already given their approval SAB's shares up nearly 9 percent in early trading. The makers of Budweiser's 3.8 percent.