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11.2011

Massachusetts Beverage Business

archivedOnBeerReport

AND THEN THERE WAS ONE?

The ink isn’t dry on the SABMiller/Foster’s deal and there are already rumblings of another Big Merger and this would be the deal to end all deals. While it’s just speculation, there’s a fair amount of industry agreement on this one: an $8O billion-plus deal between Anheuser-Busch InBev and SABMiller. If AB InBev buys SABMiller it could be the biggest cash takeover in history and would create a group brewing a third of the world’s beer. Analysts and bankers suggest 2O13 as a likely time frame for a takeover that is seen as the final play in deal-making in big world brewing. They say #1 brewer AB InBev will not be deterred from making a move for SABMiller even after the #2 brewer swallows up Foster’s. The Foster’s acquisition may delay an AB InBev-SABMiller linkup by six to twelve months pushing a possible deal to 2O13. Should this come to fruition, it would close out a decade of rapid consolidation led largely by AB InBev and SABMiller and leave few remaining easy targets, with the remaining big global brewers like Heineken and Carlsberg, as well as AB InBev, controlled by families, individuals or charity shareholders. Disposals would likely include the sale of SABMiller’s 58 percent stake in MillerCoors, probably to 42 percent co-owner Molson Coors, for around $9 billion as MillerCoor’s near-3O percent US market share added to AB InBev’s 5O percent would be too much for US authorities. A further move would probably be the sale of SABMiller’s 49 percent share in Chinese brewer CR Snow, to appease Chinese authorities as AB InBev already has a significant Chinese presence. SABMiller is more vulnerable than other big brewers such as Heineken and Carlsberg as it has a relatively open shareholder base. Additionally, other possible targets such as MolsonCoors or Africa’s Castel are family controlled. Ironically, one of the big reasons people are increasingly turning away from mainstream to craft beers is that they are independent, local and personalized. Something that big beer increasingly is not. Another giant merger will only add to this sentiment.

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