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Wed 11th Nov 2015 - AB InBev and SABMiller agree takeover terms, SABMiller to sell US interests
AB InBev and SABMiller agree takeover terms, SABMiller to sell US interests: The boards of AB InBev and SABMiller have reached agreement on the terms of a recommended acquisition of SABMiller by AB InBev. The transaction will be implemented by means of the acquisition of SABMiller by Newco (a Belgian company to be formed for the purposes of the transaction). AB InBev will also merge into Newco so that, following completion of the transaction, Newco will be the new holding company for the combined group. Pursuant to the terms of the transaction, each SABMiller shareholder will be entitled to receive £44 in cash for each share. The cash sum represents a premium of approximately 50% 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); and a premium of approximately 36% to SABMiller’s three month volume weighted average share price of £32.31 to 14 September 2015. The transaction will also include a partial share alternative under which SABMiller shareholders can elect to receive £3.7788 in cash for each share and 0.483969 restricted shares. Meanwhile, AB InBev has announced an agreement with Molson Coors regarding a complete divestiture of SABMiller’s interest in MillerCoors, a joint venture in the US and Puerto Rico between Molson Coors and SABMiller. The total transaction is valued at $12bn and is conditional on the completion of AB InBev’s acquisition of SABMiller. The SABMiller transaction is expected to complete in the second half of 2016, subject to satisfying the relevant regulatory clearances. Under the terms of the purchase agreement, Molson Coors will acquire SABMiller’s 50% voting interest and 58% economic interest in MillerCoors. Upon completion of the transaction, MillerCoors will become a wholly owned subsidiary of Molson Coors, and Molson Coors will have full control of the operations and resulting economic benefits of MillerCoors. Under the agreement, Molson Coors will acquire full ownership of the Miller brand portfolio outside of the US and retain the rights to all of the brands currently in the MillerCoors portfolio for the US market, including import brands such as Peroni and Pilsner Urquell. The sale also includes the global Miller brand, currently sold in over 25 countries (including Canada, Colombia, Czech Republic, Ecuador, Mexico, Panama, Romania, Russia, South Africa and the United Kingdom), as well as related trademarks and other intellectual property rights. Carlos Brito, chief executive of AB InBev, said: “Our combination with SABMiller is about creating the first truly global beer company and bringing more choices to beer drinkers in markets outside of the US. We are pleased to have reached this agreement with Molson Coors to divest SABMiller’s US assets. We will continue to proactively address any regulatory concerns regarding our combination with SABMiller in other relevant markets.” Mark Hunter, president and chief executive of Molson Coors, added: “SABMiller has been an excellent partner for the past seven years and we are extremely proud of the organisation that our teams have created. We have a deep passion for and understanding of the MillerCoors brands, strategy and culture and believe this transaction is the ideal outcome for this business. We look forward to continuing to provide our distributors, retailers and consumers with an extraordinary portfolio of brands.”


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