News AB-InBev and SABMiller merger?

Discussion in 'Beer News & Releases' started by Mebuzzard, Oct 30, 2013.

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  1. Mebuzzard

    Mebuzzard Poo-Bah (3,397) May 19, 2005 Colorado

  2. FanofHefe

    FanofHefe Meyvn (1,106) Feb 13, 2010 Illinois

    While I'm certainly no expert, I find it hard to believe that regulators could approve this deal. It would be a near monopoly on AALs, right? Might work for the worldwide market, but in the US, it would seem to be problematic.
     
  3. shamrock071521

    shamrock071521 Initiate (0) Aug 23, 2012 Michigan


    About halfway through the article:
    I also found this interesting, never realized who owned SABMiller, for some reason I always though it was some sort of South African conglomerate
     
  4. macandrewsRIP

    macandrewsRIP Initiate (25) Oct 28, 2007 Massachusetts

    yeah, I doubt the SEC would approve this. Plus something about these two seething, poison-spitting, warring gargantuas finally stop flailing away at each other after some 50-odd years, life as we know would stop instantaneously and every molecule in your body would explode at the speed of light. Total protonic reversal.
     
  5. FanofHefe

    FanofHefe Meyvn (1,106) Feb 13, 2010 Illinois


    Ha, ha. Helps to read the entire article. I thought it ended at the long list of links and didn't read further.

    But, glad to know the experts agree with me!
     
  6. rgordon

    rgordon Defender (637) Apr 26, 2012 North Carolina

    The Consolofragmentonic Effect, it has been predicted!
     
  7. rxeight

    rxeight Aspirant (289) Feb 5, 2012 Illinois

    The department of justice would say it violates antitrust laws.
     
  8. joelwlcx

    joelwlcx Initiate (196) Apr 23, 2007 Minnesota

    Mother of god...
     
  9. jesskidden

    jesskidden Meyvn (1,169) Aug 10, 2005 New Jersey
    Subscriber


    Yeah, Altria's huge minority share of SABMiller is a result of (pre-name change) Phillip Morris' 2002 sale of Miller to SAB (which, by then, was already headquartered in London). That's the twist with these multinational corporations, they really have no loyalty to any one nation or even an actual "home" country.

    After the Molson-Coors merger, Canadians complained about Molson being "American-owned" while some US beer drinking xenophobes would claim Coors was owned by them damned Canadians (NOBODY wanted them!).

    And, while ABInBev is headquartered in Belgium (as had been Interbrew and InBev), most of the current top executives originally came from Brazil's AmBev.
     
  10. Derranged

    Derranged Devotee (462) Mar 7, 2010 New York

    I thought Molson owned Coors and Coors teamed up with Miller?
     
  11. RichardMNixon

    RichardMNixon Initiate (0) Jun 24, 2012 Pennsylvania
    Beer Trader

    As I understand, MolsonCoors is joint owned by the two companies - it was a combination and not one taking over the other.
    MillerCoors is a SABMiller and MolsonCoors partnership (in America only) to increase their individual competitiveness vs. ABInBev. It's teamwork, not an actual company or anything.
     
  12. freakeconomist

    freakeconomist Initiate (0) Oct 8, 2013 Georgia

    Although this is a reasonable speculation.... I'm pretty sure a merger between the two would violate several laws preventing monopolies... even if ABInBev doesn't take SABMiller's share, it's still monopolizing the market for American Lagers.
     
  13. jesskidden

    jesskidden Meyvn (1,169) Aug 10, 2005 New Jersey
    Subscriber

    MolsonCoors was a merger of the two companies - a "merger of equals" according to some headlines at the time - with the former Molson shareholders controlling 55% of the new company, but Coors family members remain in the company, including Chairman Peter Coors.

    MillerCoors, which only exists in the US, is a joint venture, a merger of the US divisions of MolsonCoors and SABMiller.
     
  14. jesskidden

    jesskidden Meyvn (1,169) Aug 10, 2005 New Jersey
    Subscriber

    As noted in other posts (and the links), the speculation has always been that a merged ABI-SABMiller would have to spin-off it's US division - what used to be Miller Brewing Co. - with the most likely purchaser being MolsonCoors (which owns, roughly, the other half of the joint venture MillerCoors).

    AB-InBev's lawyers are pretty familiar with the US DoJ and their Anti-Trust division at this point - having worked out spinning off the rights of the Labatt brand in the US (to NAB) after the AB-InBev merger and, more recently, selling off the US rights to Corona and the other Modelo brands as well as Modelo's most modern and largest Mexican brewery to Crown/Constellation, after the ABI purchase of Groupo Modelo.
     
  15. rgordon

    rgordon Defender (637) Apr 26, 2012 North Carolina

    These big guys will do whatever they want. It will make little difference what the masthead says. Coming from a small business background, I always liked my competitors getting bigger; my customers always appreciated working with smaller flexible business partners. The big companies will get bigger, but not necessarily better. Generally speaking, I think mega-amalgamation creates opportunities for emerging local and regional brewers.
     
    Redrover likes this.
  16. spicoli00

    spicoli00 Defender (641) Jul 6, 2005 Indiana

    as rxeight mentions, the Department of Justice or the Federal Trade Commission is the regulator that approves. AB and Miller would submit themselves to the Hart Scott Rodino process which reviews the transaction for anti-competitiveness.

    http://www.ftc.gov/bc/hsr/

    and i agree, this seems like a big stretch for so many reasons. With U.S. market share of macros slowly eroding, why wouldn't either of these guys look at stuff in emerging markets? also, the u.s. craft beer market has to be compelling though neither could probably do a larger one again for anti-competitive reasons. so, organic growth there more likely.
     
  17. hopfenunmaltz

    hopfenunmaltz Meyvn (1,199) Jun 8, 2005 Michigan

    Don't forget the EU, they review mergers for their market.
     
  18. spoony

    spoony Poo-Bah (1,650) Aug 1, 2012 Colorado
    Beer Trader

    Some of the articles on Brito and InBev imply that if InBev were to stop expanding, it would simply collapse on itself. See here, for example: http://www.businessweek.com/articles/2012-10-25/the-plot-to-destroy-americas-beer

    While many in the United States rightfully suspect that antitrust regulators would fight this in the States, I wonder what European regulators would think? What kind of market share would a combined ABInBevSABMiller have in the EU?
     
  19. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    I thought MO spun off Miller as an independent company prior to the SAB purchase. Its hard to keep track of all the MO spinoffs though, Miller, Kraft, PMI, etc. Probably my best ever stock purchase decision was purchasing a bunch of MO in the late 90s and just holding.
     
  20. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    Actually, it is an actual company.

    But, yes its only in the US. And MolsonCoors and SABMiller both own approximately 50% of the company.
     
    RichardMNixon likes this.
  21. jesskidden

    jesskidden Meyvn (1,169) Aug 10, 2005 New Jersey
    Subscriber

    Not the way it was reported at the time. Philip Morris sells Miller to SAB
    (Hmm...note, too, that back then immediately after the deal, PM's percentage of SABMiller was 36%).

    Yeah, that sure is the case. Always thought it was unfortunate, too, because they came close to being able to create a division by merging two of the subsidiaries - the Kraft Beer Co... could have driven the beer geeks and the Brewers Association crazy. ;)

    And, finally ended the possibility of Marlboro Beer.

    [​IMG]

    MolsonCoors' ownership percentage of the US JV MillerCoors is only 42%, according to that link above for Peter Coor bio.
     
    Ranbot likes this.
  22. RichardMNixon

    RichardMNixon Initiate (0) Jun 24, 2012 Pennsylvania
    Beer Trader

    Oops, I think "Joint Venture" is where everyone without a business background (myself included) gets confused about MillerCoors, so I tried to explain it without using that phrase, but I am apparently also confused. Derp.
     
  23. rgordon

    rgordon Defender (637) Apr 26, 2012 North Carolina

    At least we didn't have to learn that the Marlboro Man died of cirrhosis somewhere in the future.
     
  24. otispdriftwood

    otispdriftwood Crusader (736) Dec 9, 2011 Colorado
    Subscriber Beer Trader

    But think of the technological advances. Bow-tie cans with vortex pouring capability. Triple hopped Bud Light. The King and Champagne of beers. The list is endless.
     
    spicoli00 and Mebuzzard like this.
  25. rgordon

    rgordon Defender (637) Apr 26, 2012 North Carolina

    True. The innovative potential is mind boggling. Like Mad Men meets Blue Velvet. Elvira Lives yet!
     
  26. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    42 and 50 are same order of magntitude, close enough for me. :)
     
  27. siknessinwi

    siknessinwi Initiate (0) Mar 30, 2010 Wisconsin

    Seems like the deal is much more focused on gaining market share and assets on a global level, specifically the emerging Asian markets. It's also interesting how other ventures are coming into play with soda bottling, etc. Its somewhat reminiscent of how tobacco companies, specifically PMI, expanded into other fields.
     
  28. kdb150

    kdb150 Devotee (447) Mar 8, 2012 Pennsylvania

    Not necessarily. There's definitely a very slim chance we'll survive.
     
  29. Crusader

    Crusader Initiate (179) Feb 4, 2011 Sweden

    SABMiller definitely brings something interesting to the table with its ownership of Snow beer which is a comparatively big brand in China, so it would give ABInbev ownership of a "national" Chinese beer brand along with its international premium brands that it's trying to sell there (but obviously in most beer markets national, if not regional brands make up the majority of sales, you can't expect Budweiser to make up more than a minority of any given beer market). In Africa SABMiller has a strong and growing footprint in growing consumer markets which might also prove attractive to ABInbev.

    Concerning soda bottling I'm surprised that they aren't already doing this in the US, since soda manufacturing, not just bottling, is a common side business for breweries (but I guess the beer volumes in the US market have been such as to not require diversification, at least in the past). The typical northern European brewery will have a beer business, a cider business, a soda business and a bottled water business.
     
  30. Ranbot

    Ranbot Devotee (412) Nov 27, 2006 Pennsylvania

    Many of the larger craft brewers are definitely in the soda and cider markets, like Boston Beer Company (Sam Adams) and FX Matt come to mind...I'm sure there are many others.

    This actually raises the point that there might be other potential buyers out there for a Miller spin-off in the US than just the existing big players in the beer market. What if a company like Coca-cola or Pepsi felt like they could compete in the beer market? That could get interesting... Speculation....
     
  31. Hanglow

    Hanglow Defender (605) Feb 18, 2012 United Kingdom (Scotland)

    Do either of them have a tied estate, either through the parent company or through their subsidiaries, or is that just a british thing? I've never really thought about it beyond the uk
     
  32. Crusader

    Crusader Initiate (179) Feb 4, 2011 Sweden

    Good point. I know that Coca Cola Amatil, which is 29% owned by Coca Cola Company, has entered into the Australian beer market recently.

    Though the speculation at this point would point towards Pepsi-Co being bought by ABInbev rather than the other way around, or a soda company buying the remains of Miller.
     
  33. spicoli00

    spicoli00 Defender (641) Jul 6, 2005 Indiana

    Yeah their approval process is nuts. IIRC, you either have get approval from basically the affected members (which would be i'm assuming every country in the EU) or you can appeal to the EU Commission for overall EU approval. then there's a still like a 3 or 4 tier approval process to go through. In short, it sucks and takes way longer than the U.S.
     
  34. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    Its mostly illegal in the US due to the 3 tier laws.

    Prohibition ended tied houses in the US.
     
    Hanglow likes this.
  35. spicoli00

    spicoli00 Defender (641) Jul 6, 2005 Indiana

    Yeah, they're based in Chicago. was always looking at their job postings.
     
  36. spicoli00

    spicoli00 Defender (641) Jul 6, 2005 Indiana

    I believe that Snow is actually the "best selling" beer in the world by volume.
    http://www.thedrinksbusiness.com/2013/06/the-worlds-top-10-beer-brands/11/
     
    Crusader likes this.
  37. LAD

    LAD Initiate (0) Apr 16, 2008 Texas

    Philip Morris sold Miller to SAB. Miller was never independent in recent times.
     
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