A-B InBev Makes Offer to Buy SABMiller

Anheuser-Busch InBev revealed today it has made an offer to SABMiller to unite the world’s largest beer makers. The combined company would have a market capitalization of some $275 billion and be by far the largest brewer in the world, controlling about one third of the world market.

Any such deal would be carefully scrutinized by regulators and require that the companies involved sell off parts of their current operations.

“AB InBev’s intention is to work with SABMiller’s Board toward a recommended transaction,” AB InBev said in a statement. “There can be no certainty that this approach will result in an offer or agreement, or as to the terms of any such agreement.”

SABMiller is London based, and under U.K. takeover rules, AB InBev has until 5 p.m. on Oct. 14 to make an offer for SABMiller or walk away. SABMiller can then extend the negotiation process.

Buying SABMiller would strengthen AB InBev’s position in fast-growing economies in Africa and Asia. SAB Miller employs about 69,000 people in more than 80 countries, including Australia, Zambia, Colombia and the Czech Republic.

AB InBev was created in 2008 when Brazilian-Belgian brewer InBev bought Anheuser Busch. The company has operations in 25 countries and makes more than 200 beers, including Stella Artois and Beck’s.

There are significant antitrust hurdles to the deal, particularly in the United States, where the companies would have about 70 percent of the beer market, and parts of some of the companies likely will have to be sold. There was immediate conjecture about how a deal might affect the overall market in the United States, and the impact on distribution and sales of smaller breweries.

Brewers Association director Paul Gatza offered some thoughts on the BA website:

“In terms of impact on craft, my first thought is that most craft brewers operate in a different sphere—their communities and regions primarily. … Many craft brewers would look at a potential deal of Anheuser Busch-InBev and SABMiller as not relevant to their businesses and will keep on doing what they do—make flavorful and high quality beer, engage beer drinkers and serve the community through jobs, involvement and serving as a place for people to gather and discuss the events of the day.”