InBev and Anheuser seen holding deal talks

By Martinne Geller and Jessica Hall

NEW YORK/PHILADELPHIA (Reuters) - Anheuser-Busch BUD.N has finally begun negotiations for a friendly merger with InBev INTB.BR, a source familiar with the situation said on Friday, sending shares of both brewers up more than 7 percent.

Anheuser, the maker of Budweiser and Michelob, had been a reluctant takeover target, spurning InBev's $46.3 billion (23.4 billion pound) bid and fighting efforts by the Belgian-Brazilian company to oust its board.

After a month of mounting tensions, The Wall Street Journal reported on its website on Friday that InBev, maker of Stella Artois and Beck's beer, had raised its bid to $70 a share from $65 in an effort to seal a friendly deal.

The new offer, which values the No. 1 U.S. brewer at $50 billion, reflects a premium of 33 percent over Anheuser's closing price on May 22, the day before media reports of takeover talks surfaced.

Anheuser's board is likely to accept the sweetened offer this weekend, the paper said, citing a person familiar with the matter.

At the same time InBev quashed concerns over its financing by launching a $45 billion syndicated loan backing the proposed takeover, banking sources told Reuters on Friday.

The sources said the loan's terms were among the highest seen on an investment-grade acquisition loan, making this a "must-do deal" for banks, which have been hurt as credit market turmoil has stymied the flow of deals.

The situation between the two brewers grew increasingly contentious over the last few weeks, with InBev seeking to replace Anheuser's 13-member board with its own slate and Anheuser suing InBev for making "false and misleading statements."