Budweiser maker finalizes $106 billion bid for SABMiller
LONDON — Budweiser maker Anheuser-Busch InBev says it has finalized the terms of a $106 billion takeover of SABMiller that will combine the planet's two biggest brewers and create a company that makes almost a third of the beer consumed worldwide.
As part of the deal, SABMiller will sell its stake in a venture with Molson Coors. That should ease concerns that AB InBev would have a stranglehold on the U.S. market after the merger and pave the way for approval by American regulators.
We won't know today how this $12 billion sale will affect workers in Milwaukee. The reason for the sale is that SABMiller needed to unload its share of MillerCoors so that it could be bought by AB InBev without creating a monopoly -- at least, that's the strategy.
Those in and around Miller Valley want to know what this means for about 1,400 people who work there.
Valley Inn
For more than 50 years, the Valley Inn has poured cold ones in the shadow of the Miller Brewery.
"We have such a great relationship with Miller. I mean, they`ve taken very good care of us with, if you see inside the bar, it`s all Miller pitchers, all Miller signs," Barbara Orban, Valley Inn bartender said.
Orban says she's served plenty of Miller workers over the years. So are people worried about their jobs?
"I`m sure they are. I would be," Orban said.
Miller Lite
Molson Coors already owned a 58% share of MillerCoors -- the rest owned by SABMiller.
The new deal clears the way for a massive $106 billion sale that has AB InBev buying SABMiller.
Those following the industry say eventually, we'll see some changes.
"Now that Molson Coors has sole control, I would expect them to put their vision and stamp on the MillerCoors company so that may significantly change the direction some of those brands are taking or with what they`re doing with the company overall," Bart Watson with the Brewers Association said.
A statement from MillerCoors reads, in part: "It is business as usual for MillerCoors, and we're working hard to deliver against our 2015 plans."
MillerCoors
A Molson Coors spokesman says the first changes wouldn't come for months -- adding that it's too early to say what those changes might be in Milwaukee.
One change already expected for the Milwaukee plant: MillerCoors says it will add production next September, with the planned closure of a North Carolina brewery.
"If they`re bringing production back to Milwaukee, it gives you more of a comfort zone of 'alright, we`re gonna be OK," Orban said.
Miller beers (Credit: Chris Welch/CNN)
AB InBev and SABMiller had twice extended the deadline for a formal offer implementing an agreement in principle announced Oct. 13.
AB InBev is seeking to bolster growth by acquiring SABMiller's brands in Africa and Asia as changing tastes and craft beers cut sales in developed markets.
Bob Pease, CEO of the Brewers Association released the following statement on this merger:
“The Brewers Association, the national trade association for America’s more than 4,000 small and independent breweries, is carefully reviewing the terms of the acquisition announced today by ABInBev and SABMiller, and, in the days ahead, we would urge the Congress and the Department of Justice to closely examine the potential effects on the U.S. marketplace and American consumers of this proposed deal.
“The size and scope of the ABInBev business has many ramifications for the U.S. beer industry, even with the divestiture of the MillerCoors joint venture. The most obvious is that ABInBev is still by far the largest brewer and beer distributor in the United States. It is vital for the continued success of small brewers that we have access to market with an independent and competitive middle distribution tier.
“Over time, ABInBev will have significant new global revenues to invest in the United States if it chooses to do so as a result of this acquisition. The MillerCoors operation will undergo significant changes. ABInBev’s new international footprint and scale give the company greater influence over commodities used in brewing and many other facets of the beer industry that could affect competition in the U.S. market.
“All of these issues – and their potential effect on small brewers, the broader industry and U.S. beer drinkers – must be carefully weighed and scrutinized by antitrust authorities.”