Budweiser Is Attempting To Buy Miller And Shares Are Soaring

AB InBev

Anheuser-Busch InBev NV is making a $93 billion play to acquire SABMiller Plc. If successful the two biggest beermakers in the world would combine to control nearly half of the brewing industry’s profits.

Shares at both companies jumped on news of the possible buyout. SABMiller shares rose 23 percent for a market valuation of approximately $93 billion. AB InBev also watched shares jump by 12 percent.

AB InBev alerted SABMiller to its intentions but provided no details at this time.

 “As time progressed, we confess that our conviction was waning but it appears it is now for the deal,” Exane BNP Paribas analyst Eamonn Ferry said in a note.

AB InBev was formed during a series of purchases by a group of Brazilian businessmen. They went on a buying spree purchasing Belgium’s Stella Artois, American-made Budweiser, and others.

The beer industry has been under a tremendous amount of consolidation over the last decade as a slowdown has occurred in many established markets including the United States and Europe. Many American’s have begun to swap their beer for spirits, while others have simply begun to drink less.

Purchasing SABMiller would give AB InBev access to more than $7 billion of revenue in Africa thanks to brands such as Castle lager, and more than $4 billion in Asia.