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More swirling SABMiller-AB InBev takeover rumours

The value of the company, which sells beer brands such as Foster’s and Coors, surged after the Wall Street Journal said Anheuser-Busch InBev, the owner of Budweiser, was talking to banks about raising finance for an acquisition.

A tie-up between the world’s two largest brewers has been rumoured for years, but the speculation has been revived by the surge in international mergers this year. The Journal added that AB InBev was not in active discussions with SABMiller, but was attempting to line up financing before making a formal approach. Some commentators believe such a merger would not pass regulatory-competitive muster in many countries.

AB InBev is the world’s biggest brewer beer by market capitalisation and volumes brewed, followed by SABMiller, Heineken and Carlsberg.

The news came after Heineken rejected a takeover offer from SABMiller after the founding family of the Dutch brewer insisted it should remain independent.

In a statement on Monday intended to quell press speculation, Heineken confirmed it had been approached by London-listed SABMiller, the world’s second-largest brewer, but said the proposal was “non-actionable”.

Market speculation has been growing this year that SABMiller is looking to buy either spirits group Diageo or Heineken in an effort to avoid being absorbed by AB InBev.

Diageo’s shares closed 2.23% up in London on Monday. On whether SABMiller had approached the company with a separate offer, a Diageo spokesman said: “We do not comment on rumour and speculation.”

Barclays sees a Diageo-SABMiller merger as a “credible alternative” to an AB InBev deal. This could take the form of a full merger, or SABMiller buying Diageo’s beer business, which includes Guinness and Kilkenny.

Barclays said on Monday it estimated that integrating Diageo’s Guinness business into SABMiller “could yield over £400m of cost saving and additional revenue synergies”.

“Moreover, although the benefit of combining spirits and beer is less evident in some markets, overall value creation from a full merger could still be attractive.”

Source: The Guardian, BDLIve