The largest brewery group in the world, Belgian-Brazilian AB InBev, has plans to bid for its largest competitor, SABMiller, after the possible deal between SABMiller and Dutch Heineken failed.
No take-over talks (yet)
The rumours surrounding the possible AB InBev interest in SABMiller, number two in the beer market, have appeared every now and again, but according to The Wall Street Journal, the company is now talking to banks about the terms to possibly finance the deal.
The Belgian-Brazilian giant would be willing to pay 75 billion pounds (95 billion euro) to acquire its South African competitor (with its main office in London). That would be much more than the 52 billion dollars former InBev paid to buy American Anheuser-Busch in 2008.
The American business paper emphasizes there have been no take-over talks between both companies (yet): AB InBev is apparently first trying to tie the financial ends together before lodging an official bid.
Failed talks with Heineken
"We do not comment on market rumours and speculations"", the company said, while SABMiller has also refused to comment. However, analysts are assured that AB InBev means business.
It leaked on Sunday evening that SABMiller had tried to acquire number three in the beer market, Dutch Heineken, but failed. "In response to recent press speculation Heineken announced today that it has been approached by SABMiller plc regarding a potential acquisition of Heineken", the Dutch company confirmed, but they have considered the proposal to be "non-actionable".
The Heineken bid is widely considered to be a "defensive move to keep the Belgian-Brazilian beer group out" of SABMiller, according to financial press agency Bloomberg.
AB InBev has Stella, Budweiser and Corona as worldwide brands, but it also has brands like Becks, Leffe and Hoegaarden, while SABMiller has brands like Peroni, Pilsner Urquell, Grolsch, Fosters and Miller.
Geographically, a merger between AB Inbev and SABMiller would make sense as the former is mostly a force in the United States, Mexico and Brazil while the latter has a huge impact in Africa, China and Australia. Both groups would have to get rid of several brands to avoid a monopoly position.
AB InBev sold 425.9 million hectoliters of beer last year, worth 43.2 billion euro. SABMiller sold 245 million hectoliters, worth 16.8 billion euro. Interesting detail: SABMiller has one Belgian beer, Sint-Stefanus, also known as Augustijn in Belgium.