SABMiller Shareholders Approve Anheuser-Busch InBev Takeover

SABMiller shareholders backed the brewer’s $100-billion-plus takeover by rival Anheuser-Busch InBev by a large majority on September 27,2016 paving the way for the third-largest merger in corporate history which will see combined group sell one in four beers globally.

The vote came after AB InBev shareholders voted in favour of the deal at an earlier meeting in Brussels, where it was announced that the combined group will retain the AB InBev name.

There was some disappointment among SABMiller’s rank and file at the meeting that AB InBev had decided to retain its name for the enlarged company without any concession to the SABMiller corporate moniker.

The approval of SAB shareholders was widely expected, but not a given. Criticism of the takeover offer grew over the summer, after a steep fall in sterling following Britain’s vote to leave the European Union made AB InBev’s cash offer less appealing.

Activist shareholders pressured SAB to seek a higher offer, prompting AB InBev BUD 0.38% to sweeten its bid in July. SAB backed the higher offer, though some prominent shareholders, including Aberdeen Asset Management, continued to oppose it.

The takeover is expected to be completed on Oct. 10, nearly a year after AB InBev first approached SABMiller about the acquisition, which required a succession of sweetened bids to win over SAB and asset disposals to satisfy regulators around the world.

The shares of the new company will begin trading on Oct. 11 in Brussels, with secondary listings in Johannesburg and Mexico City and American Depositary Shares in New York.

AB InBev has lined up $16.5bn in disposals of SAB assets in the US, China and Europe to secure approval from antitrust regulators in more than 20 countries. The company is expected to kick off a sale process for SAB’s central and eastern European brands, estimated to be worth up to 7 billion euros.

After selling off SAB’s joint venture stakes in China and the United States and its businesses across Europe, the combined company will have a 27 percent share of the global beer market, according to Euromonitor International. AB InBev was already the world’s biggest brewer but the takeover of SAB will see it sell one in four beers and reap 45 per cent of the industry’s profits.

It will give AB InBev access to growing beer markets in Africa, where it barely has a presence and in parts of Latin America where it was not already dominant. Still, competition in individual markets will remain relatively unchanged, since the two companies have very little geographic overlap.

The acquisition is the most ambitious in a series of audacious takeovers spearheaded by Jorge Paulo Lemann, the Brazilian billionaire who is AB InBev’s single largest individual shareholder. It will also mark the end of the former South African Breweries’ 120-year history as an independent company.