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AB InBev prepares biggest takeover bid ever

10:35 16/09/2014

Leuven-based AB InBev, the world’s largest brewing group, is reported by the Wall Street Journal to be in talks with its banks with a view to preparing a takeover bid for SABMiller, its biggest competitor, now based in London.

The bid is said to be worth €94.2 billion, the largest the beer industry has seen since the takeover of Anheuser-Busch by InBev in 2008.

SABMiller – originally South African Breweries – was established to meet the beer needs of South African miners at the end of the 19th century and moved its base to London in 1999, three years before taking over Miller Brewing of Milwaukee.

SABMiller has operations worldwide and owns several brands, including Pilsner Urquell, Fosters, Grolsch, Peroni and Carling Black Label. The company is also a major bottler of Coca-Cola.

Rumours of a bid by AB InBev have been circulating for some time, with a recent failed bid by SABMiller to take over Dutch brewer Heineken, owner of Alken-Maes, a sign of a pre-emptive attempt by SABMiller to defend itself. A takeover of Heineken would have made SABMiller too large to be in danger of being taken over itself. News of the failed bid was only released at the weekend, when Heineken responded to rumours.

A takeover by AB InBev would make its position as the world’s largest brewery unassailable and give the Leuven brewing giant new market possibilities in Africa, China and Australia. AB InBev brands include Jupiler, Stella Artois and Hoegaarden in Belgium, and Budweiser and Corona in the US.

Both companies declined to respond to the rumours. On the Brussels stock market, AB InBev finished up 2.82% as a result of the rumours, pushing the Bel20 index to close up .30% at 3,182.14. 

Written by Alan Hope