The prospect of the world’s largest brewer getting even bigger has got investors positively drunk with excitement this morning. Anheuser-Busch InBev, which makes Stella Artois and Budweiser, is planning to make an offer for rival SABMiller – and both’s shares are positively frothing over.
SABMiller shares jumped as much as 23.4% when it confirmed the approach just after 10am (after the FT told the company it was about to break the story), dropping back to 3,616p within an hour, a rise of around 20%. Brussel’s-listed AB InBev’s shares rose as much as 11.6%, before bubbling down to €101.45 (£74), a 7.4% increase.
No formal offer is actually on the table yet, but AB InBev is wooing SABMiller’s management with the aim of making the deal a friendly one, according to the FT.
SABMiller, which sells Carling and Fosters and is dual-listed in London and Johannesburg, had a market capitalisation of around £50bn before the news broke. AB InBev, whose largest shareholder is aggressive Brazilian private equity firm 3G (of Heinz-Kraft takeover fame) was more than double the size, at €156bn. That combined market cap would be a whopping $250bn (£162bn).
Clearly, regulators around the world won’t just wave a deal of this size through. But AB InBev would apparently be happy to sell SABMiller’s North American beer Coors, unnamed experts told the FT.
The probability of having to sell valuable real estate to get blessing for the marriage doesn’t seem to have bothered investors, though. Nothing like a mega-merger for making merry on a grey Wednesday, eh?