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AB InBev launches record SAB deal

Wednesday, November 11, 2015 - 01:41

Anheuser-Busch InBev has launched its $100 billion-plus offer for nearest rival SABMiller. As David Pollard reports, the world's biggest brewer has agreed to sell SAB's stake in U.S. venture MillerCoors to help win regulatory approval.

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It's not been all froth for the world's brewers. Just today, Carlsberg announced 1.4 billion dollars in charges. It's long struggled in Russia, and 2,000 jobs are to go. This, though, a plan by the biggest brewer of all, AB InBev, to grab new markets. If, first, there are other concerns. IG's market analyst Alastair McCaig. (SOUNDBITE) (English) IG MARKET ANALYST, ALASTAIR MCCAIG, SAYING: "It is undoubtedly going to kick off a round of asset-stripping from AB InBev ... as they (a) look to raise finances for this but also (b) maybe preemptively move ahead of any regulatory requirements." The sale of SABMiller's stake in MillerCoors for 12 billion dollars should satisfy US regulators. It remains to be seen whether its stake in China's leading brewer, CR Snow, will go the same way. AB InBev is already the biggest player in the US, Brazil and Mexico - three of the top four markets. By taking over SABMiller, it can add other LatAm countries. And, crucially, a continent with a huge growth in beer-drinking: Africa. SAB is in sixteen countries there. Its shareholders may well celebrate too. (SOUNDBITE) (English) IG MARKET ANALYST, ALASTAIR MCCAIG, SAYING: "SABMiller have hung out for as long as they possibly could to ensure that their shareholders get as much of the benefits out of the tie-up with AB InBev as they possibly could. A £44 price looks like it's going to go through to completion." The total price tag for the takeover: that's no small beer either. At 106 billion dollars, one of the largest deals ever - and financed by borrowing 75 billion dollars - that also a record-breaker as the largest ever commercial loan.

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AB InBev launches record SAB deal

Wednesday, November 11, 2015 - 01:41