The Anheuser-Busch InBev takeover offer for SABMiller has been modified in view of the drop in the value in sterling after the UK’s Brexit vote to leave the EU. Headquartered in Belgium, the multinational Belgian-Brazilian Anheuser-Busch InBev is the largest brewer in the world with a 25% share of the world’s beverage and beer market.
Based in London UK, SABMiller plc is also a multinational beverage and brewing company, and is the world’s second largest brewer and a major Coca-Cola bottler. The drop in the value of UK Sterling (the pound) against other currencies, including the US dollar, led to an effective drop of the value of the offer that was made in terms of UK currency.
The Anheuser-Busch InBev takeover bid had valued SABMiller at £70 billion (UK pounds) in November which converted to $106 billion at that time. After Brexit, the drop in the value of UK currency reduced the dollar value of the offer to just $92 billion – $14 billion less than the 2015 offer.
Something had to be done to compensate for the drop in UK currency value. Anheuser-Busch InBev has now responded to make the offer equal to the original in dollar terms. This was achieved by increasing the valuation of SABMiller to £79 billion ($104 billion) with a share offer up to £45 per share from £44 in November.
In effect, what has happened is that the dollar value of the offer has stayed approximately the same while the UK pound value has increased due to the reduced value of sterling after Brexit. The term ‘after Brexit’ is used to refer to the period after the UK population voted narrowly to leave the EU.
AB InBev also increased the cash element of the share-and-cash structure they are offering the two largest shareholders of SABMiller. The cash element of the Anheuser-Busch InBev takeover has been increased from the £3.78 offered in November to £4.66 now. The company stated that the revised figures were final and that there would be no more changes.
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