12 November 2015 11:52

SABMiller and AB Inbev Merger Final

It's official. AB Inbev has bought SABMiller for over R1.4 trillion. The world's two biggest beer producers will come together to form the company Newco.

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 merge into Newco so that, following completion of the Transaction, Newco will be the new holding company for the Combined Group.

In order to comply with anti-monopoly regulations, the company will be required to jettison some of their brands, including SABMiller's sale of its stake in US joint venture MillerCoors. However, Newco will still supply roughly a third of the world's beer sales by volume, making it one of the largest consumer product companies in the world.

So look out for an influx on international beer brands to the SA market. It will be interesting to see how ardent SAB drinkers react to the arrival of the likes of Budweiser. Will local consumers show patriotic loyalty to local brands, or will the shiny allure of all things American hold sway? Time will tell.