Advertisement

Budweiser Owner Agrees Peroni Takeover Terms

The prospect of the biggest foreign takeover of a British firm has taken a leap forward, with the owner of Budweiser agreeing terms with SABMiller.

While no formal offer for the FTSE 100 company has yet been submitted by AB InBev, SAB said its board was giving unanimous backing to an upwardly revised approach - reported by Sky News on Monday.

The fifth offer represented a 50% premium on the share price of SABMiller, best known in the UK for the Peroni beer brand, before the first approach was made.

The latest deal on the table would value SAB at almost £70bn - making it the fourth highest-value takeover of all time.

The fresh proposal of £44-per-share was made following a mixed response among major shareholders to AB InBev's previous approaches.

For tax purposes the two biggest investors, Altria and BevCo - a vehicle of the Santo Domingo family - would have the option of receiving some of the proceeds in AB InBev shares but at a reduced value.

Should a formal offer be accepted, SAB said AB InBev would have to agree to a $3bn (£2bn) 'reverse break fee' - payable to SABMiller - should the deal later fall through.

Its board had spurned AB InBev's previous approaches, saying they had "significantly under-valued" the business and it saw great value for investors as a standalone business.

It is already the world's second-largest brewer - behind AB InBev.

A combined company would be worth over £180bn and give AB InBev access to markets where it is poorly represented, such as Africa.

A tie-up could lead to some brand sales to satisfy any competition concerns while there would also be pressure on jobs.

SAB employs almost 70,000 people globally while AB InBev has 155,000 staff.

SAB's shares opened 9% higher when trading began on the FTSE 100 on Tuesday.

The price per-share of £39.4p remained below the £44 agreed under the approach.