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Wed 7th Oct 2015 - Anheuser-Busch InBev tables new offer for SABMiller
Anheuser-Busch InBev tables new offer for SABMiller: Anheuser-Busch InBev has unveiled a revised proposal to the board of SABMiller to combine the two companies and build the’ first truly global beer company’. The revised proposal that AB InBev has made is to acquire SABMiller for £42.15 per share in cash, with a partial share alternative available for approximately 41% of the SABMiller shares. AB InBev has made two prior written proposals in private to SABMiller, the first at £38.00 per share in cash and the second at £40.00 per share in cash. AB InBev said it is disappointed that the board of SABMiller has rejected both of these prior approaches without any meaningful engagement. AB InBev believes that this revised proposal should be highly attractive to SABMiller shareholders and provides an extremely compelling opportunity for them. The cash proposal represents a premium of approximately 44% to SABMiller’s closing share price of £29.34 on 14 September 2015 (being the last business day prior to renewed speculation of an approach from AB InBev). The revised proposal is designed to enable a compelling cash offer to be made to SABMiller’s public shareholders and to provide a continuing attractive investment for Altria Group and BevCo (who together hold approximately 41% of the SABMiller shares), which AB InBev believes will satisfy their financial requirements. Importantly, the partial share alternative enables appropriate financing to be achieved and supports the cash offer at a higher price than AB InBev would otherwise be able to offer. The company stated: “The combination of AB InBev and SABMiller would result in a truly global brewer that would take its place as one of the world’s leading consumer products companies. Given the largely complementary geographical footprints and brand portfolios of AB InBev and SABMiller, the combined group would have operations in virtually every major beer market, including key emerging regions with strong growth prospects such as Africa, Asia, and Central and South America. As a combined company, the group would generate revenues of $64 billion and Ebitda of $24 billion. AB InBev believes that this transaction would be in the best interests of both companies’ consumers, shareholders, employees, wholesalers, business partners and the communities they serve.” Carlos Brito, chief executive of Anheuser-Busch InBev, said: “We have the highest respect for SABMiller, its employees and its leadership, and believe that a combination of our two great companies would build the first truly global beer company. Both companies have deep roots in some of the most historic beer cultures around the world and share a strong passion for brewing as well as a deep seated tradition of quality. By bringing together our rich heritage, brands and people we would provide more opportunities for consumers to taste and enjoy the world’s best beers. We also both strive to have a positive impact on the communities in which we work and live as two of the world’s leading corporate citizens. Put simply, we believe we can achieve more together than each of us could separately, bringing more beers to more people and enhancing value for all of our stakeholders.”

Diageo and Heineken complete beer company transactions: Diageo has completed a transaction with Heineken which brings increased focus to their respective beer businesses in Jamaica, Malaysia, Singapore and Ghana. The transaction comprises: The sale of Diageo’s 57.87% shareholding in Desnoes & Geddes Limited (D&G) to Heineken which will increase Heineken’s shareholding in D&G to 73.32%; The sale of Diageo’s 49.99% stake in GAPL Pte Limited (GAPL) to Heineken giving Heineken full ownership of GAPL. The acquisition by Diageo of Heineken’s 20% shareholding in Guinness Ghana Breweries Limited (GGBL) which will increase Diageo’s shareholding in GGBL to 72.42%. The net cash consideration receivable for the transaction is $780.5 million (approximately £515 million). Payment to Diageo will be substantially settled today and will be used to reduce borrowings. The transaction will result in an exceptional profit on disposal of approximately £440 million after tax. It is approximately 0.6 pence per share dilutive to earnings per share pre-exceptional in the first full year assuming a marginal interest rate of 2.5%. Ivan Menezes, chief executive of Diageo, said: “The transaction we have announced today continues our proactive approach to our portfolio, enhancing our focus on the core to achieve Diageo’s performance ambition. It provides a strong route to consumer for Guinness which will grow the brand in these markets. I am pleased that this transaction meets the clear strategic objectives of both Heineken and Diageo.”

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