Beer merger won’t bring Budweiser, Miller under 1 roof

Associated Press

LONDON

The world’s two biggest beer makers will join forces to create a company that produces almost a third of the world’s beer. But in the U.S., the deal will not bring arch rivals Budweiser and Miller under the same roof.

Budweiser maker AB InBev announced Wednesday a final agreement to buy SABMiller for $107 billion.

To ease concerns the brewing behemoth might get a stranglehold of the U.S. market, SABMiller will sell its 58 percent stake in a venture with fellow brewer Molson Coors for $12 billion. The deal includes rights to the Miller brand name and gives Molson Coors full control of operations.

The combined company – which as yet does not have a name – also will need to address regulatory issues in China, where SABMiller has a leading position with a 49 percent stake in the Chinese beer Snow. China is the focus of intense interest, as it already drinks a quarter of the world’s beer.

“This combination would create the first truly global brewer,” AB InBev Ceo Carlos Brito told reporters in a conference call after the deal, which is set to be completed next year.

AB InBev is seeking to bolster growth by acquiring SABMiller’s businesses in Africa and Asia as changing tastes and the growth of craft beers cut sales in developed markets.

Though AB InBev got SABMiller’s main shareholders on board and lined up the largest acquisition debt package, Erik Gordon of the Ross School of Business at the University of Michigan said the deal faces regulatory risks.

The new company will be listed in Belgium, with secondary listings in Johannesburg, Mexico and New York.