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Anheuser-Busch, SABMiller Merger Entering Final Stages

- By Sydnee Gatewood

On Monday, Anheuser-Busch InBev (BUD) announced it expects to complete its takeover of SABMiller (SAB.L) on Oct. 10.

The news comes days after the board of SABMiller encouraged shareholders to approve the offer increase proposed by Anheuser-Busch. The offer is 45 pounds ($59) per share, an increase of one pound from the initial offer.


Anheuser-Busch increased the offer in order to accommodate the decline of the pound following Britain's decision to leave the European Union.

The deal has raised some contention among shareholders as Anheuser-Busch proposed two alternatives to shareholders, dividing them into two classes. A cash payment would be allocated to a majority of investors and a cash-and-shares offer would be given to SABMiller's two largest shareholders, Altria (MO) and the Santo Domingo family of Colombia. Both parties own 41% of SABMiller.

Shareholders from both companies will meet on Sept. 28 to vote on the deal. Since the vote will be split, the deal would need 85% backing from investors as opposed to 75% in a unified vote.

The merger between the world's two largest breweries would give Anheuser-Busch control of nearly one-third of the world's beer supply.

Anheuser-Busch will publish the takeover terms today.

Disclosure: I do not own stock in any companies discussed.

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This article first appeared on GuruFocus.