British-owned SABMiller, one of the brewing giants of the market and Miller’s parent company, is looking forward to combine with Belgian-Brazilian company Anheuser Busch InBer, also known as AB InBev, through a merging deal.
Apparently, SABMiller wants to take over their rivals in order to solve issues like the surge in popularity of craft beer and their weakening sales on rich markets, from Europe and the U.S.
The new group will control almost one third of the market
Their main purpose is to create an ever bigger company which should control more than 30% of the global beer market, as stated by Dispatch Times, creating a group that will most likely dominate every major market in the world. The deal has a value of $104 million, but it needs to be approved by regulators, alongside SABMiller‘s shareholders.
The same source mentions that the deal might face resistance from regulators, especially in the United States and China. Besides this, it could lead to complications for joint ventures like MillerCoors, an agreement between SABMiller and Molson Coors of Canada.
According to a statement released by SABMiller last week, the companies had agreed to a deal, even though they still need to set the terms of a formal offer, therefore the deal’s deadline was extended to October 28.
The deal is surrounded by skepticism
Even though the deal looks like a sure this, there are a lot of analysts that are skeptic about the two companies agreeing to terms. Apparently, there are opinions claiming that antitrust issues could wreck the deal or lead to a slimming-down in markets like the United States and China.
On the other side, there’s one alternative left: partial share, designed for SABMiller‘s shareholders, cigarette company Altria and BevCo, both of them owning more than 40% of the UK-based brewing giant.
