AB InBev seriously considering purchasing SABMiller

The hoops they would have to jump thru to make that happen would be massive. First thing they would have to do is sell off all the SABMiller American brands.

Edit: Since MolsonCoors and SABMiller have already merged American business into MillerCoors, Im sure the sale of the American Miller business outright to MolsonCoors would be allowed.

 

My head just exploded.

 

Didn't read article, but...

Didn't they just hafta dance on a tightrope for their last acquisition to meet the sniff test of monopoly? If this wouldn't be a monopolisitic conglomerate, what would?

 

If they sell off enough stuff in America and Europe they could probably make it happen.

 

Outburst, Bonkers!, or Sorry!?

 

If they do this, I think a lot of people will be Sorry!

 

That is a whale of a debt load, especially when the article states they still have not paid off the debt from swallowing AB in 2008.

 

haha this got me looking at all the beer brands they may acquire. I came across the First stone beer thats not bitter http://www.sabmiller.com/brands/brand-explorer/stone-strong-lager

 

Aside from tallboys of bourbon county at football games, I don't like what the rock is cooking here.

 

It would be Bonkers. My head would Outburst.

 

Maybe the cost of the merger would be off-set some by selling off American Miller and possibly other AB brands to MolsenCoors?

Also, is the US the only country these two companies have so much market share that they have to worry about anti-trust issues? I'm sure there's enough other competition in European and Asia, but I'm not as familiar with other markets (Central/South America, Africa, etc.) Or do other countries just not care about monopolies?

 

Thanks for sharing. I found this passage from the article to be interesting:
"The companies, when combined, are expected to achieve more than $2 billion in synergies and cost saving through unified services and the removal of job redundancies. When it comes to mergers and acquisitions, AB InBev CEO Carlos Brito is known for his cut-throat approach to cost savings. Consequently, the market is generally optimistic about the combined entity’s potential."
Job redundancies - those are the people they will fire. And I suppose the CEO's cut-throat approach to cost savings does not include his own compensation. One of the things I like most about the growth of craft beer is that these guys are adding jobs to the communities they serve.

 

something like this might let loose a bunch of people who want to strike out on their own but haven't had that last little push

 

This whole thing has gotten tamped down quite a bit. It looks like they would have to pay a 30% premium for SAB-Miller and it is already riding high due to the speculation. They have to sell their 53% stake in the Miller Coors JV and divest itself of the Miller brands worldwide and then take a haircut on the sales price. The speculated debt they would have to take on could approach $100B and make the total company market cap over $300B. That is 5X the debt of the Grupo Modelo deal and SAB runs a tighter ship than any of the other acquisitions A-BI have done so the cost cutting won't be as severe as what they have achieved elsewhere. This doesn't take into account the other big parts of the business where A-BI are tied into Pepsi and SAB into Coke. Opening the business up for South American markets where A-BI isn't dominant and giving them a gift in Africa where they virtually have no business would be huge but the debt and the uncoupling could be the downfall.

 

The cost of the merger won't be offset by the spin off of the Miller business. I saw something talking about it only being worth $10-12B. Peanuts compared to the $100B+ it will cost. They won't have to worry about anti-trust as SAB in their dominant S.American countries has like 70-90 share as is their share in Africa. AMBEV's share is very much the same in their dominant countries in S. America.

 

This is all well and good until things slow down and then we will see what kind of businessmen the craft brewers are. Everything is rosy until the bank comes calling.

 

"Freeeeeeeeedooooooommm"

 

This story pops up every six months or so.