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Beck's Beer Maker Formalized a $106 Billion Deal Acquisition of SABMiller

Anheuser-Busch (AB) InBev NV, maker of the world's most famous beer has achieved a formal agreement to buy SABMiller PLC in a $106 billion deal. However, the deal will face a long process to pass regulatory approval in countries like from  U.S., to India and China.

According to Wall Street Journal, the deal sets in motion a complicated, yearlong process of winning regulatory approval in U.S., European Union, China, South Africa, Colombia, Australia and India. AB InBev should pass all regulations in order to complete the deal, else AB InBev is required to pay $3 billion to SABMiller.

Prior to the acquisition, AB-InBev is already the largest brewer in the world. The multinational beverage and brewer is holding 25 percent of global market share, and with acquisition of SABMiller, will add 5 percent to its market share. As the name suggested, Amheuser-Busch InBev is made of three different companies that merged as one, Anheuser-Busch InBev. They are Anheuser-Busch from the United States, Interbrew from Belgium, and AmBev from Brazil. It holds a large number of global brands, such as Beck's, Budweiser, Corona, Stella Artois and others that comprised of more than 200 brands. 

SABMiller started as South African breweries that owns Foster, Miller and Peroni brands. Before the AB InBev acquisition, the company that headquartered in London held 150 local brands of beer around the world. SABMiller has also been able to penetrate market in Africa, an emerging market with its local product. The company also handle bottling of Coca Cola products in Africa. 

This acquisition benefits AB InBev to enter emerging beer market which SABMiller has access to, such as Africa and Latin America. USA Today reported that SABMiller gets 35% of its revenue from Latin America and 34% from Africa. In a conference call with USA Today, AB InBev CEO Carlos Brito said about the acquisition, "We've admired this company for a very long time. The company has a strong portfolio of brands," and "Together, AB InBev and SABMiller create a truly global business."

In a more grim tone, The Telegraph revealed with the takeover, will result in SABMiller departure from London Stock Exchange, where it has been listed since 1999. It will also produce potential job losses and office closures in the UK and around the world. SABMiller PLC is one of FTSE 100 index that represent almost 90 percent of market capitalization in London Stock Exchange.

AB InBev NV will now control more than a quarter of the market share in the world after acquiring SABMiller. Nevertheless, it must pass regulatory approval in countries around the world to make a successful acquisition.


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