AB InBev's $104.2 billion takeover of SABMiller

SABMiller’s board has accepted the terms for the takeover worth $104.2 billion
Anheuser-Busch InBev NV (BUD) sweetened its offer for SABMiller Plc (SBMRY) to $104.2 billion … and that was good enough for the beer firm to accept the deal. But now the long, arduous process of trying to get regulatory and antitrust approval around the world begins. It could take a year or more to go through the steps, and no conclusion is assured.

• Deal creates world’s largest brewer, worth $275bn (180bn pounds), with nearly 30% market share, nearly three times its closest rival, Heineken NV
• It is the fourth-largest takeover in history and the largest this year, according to Dealogic. 
• The combined companies would generate $64 billion in revenue.
• Beer consumption in developed markets is expected to decline this year for the first time in 30 years. 
• The bulk of global growth will come from Africa, where volumes are expected to rise by 2.6%.

Anheuser-Busch InBev, abbreviated as AB InBev, is a multinational beverage and brewing company headquartered in Leuven, Belgium. It is the world's largest brewer and has a 25% global market share. AB InBev was formed through successive mergers of three international brewing groups: Interbrew from Belgium, AmBev from Brazil, and Anheuser-Busch from the United States. It has 16 brands that individually generate over 1 billion USD per year in revenue out of a portfolio of more than 200 brands (2014). This portfolio includes global brands Budweiser, Corona and Stella Artois, international brands Beck's, Hoegaarden and Leffe and local brands such as Bud Light, Skol, Brahma, Antarctica, Quilmes, Victoria, Modelo Especial, Michelob Ultra, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske and Jupiler. Total revenue for all 200 AB InBev brands in 2014 was over 47 billion USD.

SABMiller, which started as South African Breweries, has operations across Africa, giving AB InBev a lead on the fast-growing continent. It also offers AB InBev access to fast-growing markets in Latin America like Peru and Colombia, which helped deliver a 6% increase in beverage volume over the first half of the year.

• SABMiller produces Coca-Cola Co. products in at least 25 markets.
• Tobacco company Altria Group Inc (NYSE:MO) is the biggest shareholder of SABMiller with a 27% stake in the company. It was in favor of the takeover since AB InBev approached SABMiller with the offer of 42.15 pounds per share. 
• SABMiller’s second largest shareholder on the other hand, the Colombian Santo Domingo family, which holds a 14% stake and two board seats has always opposed the tie-up proposal.
• The Santo Domingo family’s holdings are valued at $14.8 billion, according to the Bloomberg Billionaire’s Index.  That fortune is largely controlled by 38-year-old Harvard-educated Alejandro Santo Domingo.  Mr. Santo Domingo is also managing director of New York-based venture-capital firm Quadrant Capital Advisors Inc.

After being rejected four times, AB InBev made the bid to pay SABMiller 44 pounds (around $68) per share in cash, and also gave the option of a cash and share mix, which was set at a discount and confined to 41% of SABMiller’s shares.

Alejandro Santo Domingo with British aristocrat Lady Charlotte Wellesley last year.