AB InBev and SABMiller are the two largest breweries in the world. Together, they control 30 percent of the world beer market, and the proposed $105 billion merger would be the biggest in the beer industry’s history.
The first major hurdle to the deal was the dissatisfaction among SABMiller shareholders with AB InBev’s original offer to buy SABMiller, which was roughly at $58 per share. In the wake of Brexit, the pound has tumbled in value, thus impacting the original price and fueling shareholder concerns that SABMiller was selling itself short.
AB InBev increased its offer from $58 per share to $60 per share to assuage investor concerns. SABMiller’s board, content with the improved offer, will recommend to its shareholders that they should accept the offer.
The merger has also garnered approvals from international regulators, with more than 21 regulators giving the deal a thumbs-up. The U.S. Justice Department is one of those in approval, green-lighting the deal on July 20 with the caveat that AB InBev then immediately sell SABMiller’s stake in MillerCoors, a brand that makes Miller, Coors, and Blue Moon.
Importantly, the proposed merger just received clearance from Chinese regulators, per The New York Times. This approval comes with a caveat similar to that of the U.S.: that AB InBev sell SABMiller’s 49 percent stake in Snow, the largest beer in China. Snow is the world’s best-selling beer by volume. With this approval, the merger cleared the last major regulatory roadblock remaining.
The stake sold for $1.6 billion to China Resources Beer Holdings Co., a government-run operation that now owns 100 percent of Snow. The deal, however massive, was still expected to be for more money — an indication that AB InBev is desperate to push through its pending mega-merger.