On Wednesday, Budweiser’s Belgian-Brazilian owner, Anheuser-Busch InBev, sweetened its offer for SABMiller to more than $104 billion, but the reply remained as bitter as the rejection of the two previous proposals.
It’s just not enough.
“AB InBev is very substantially undervaluing SABMiller,” said SABMiller chairman Jan du Plessis.
There was no outright rejection that a merger is possible, so it remains possible that AB InBev could find a more genial response if it raises its offer further.
If an agreement were eventually to emerge, the combined company would have 31 percent of the global beer market, dwarfing the next-biggest player, Heineken, which has 9 percent of the market.
And it would allow AB InBev to venture out more into the African and Australian markets, where its might is yet felt as it is in Europe, North Africa and Asia.
In the event of a deal, the sheer size of the combined company is expected to push regulators to require the sale of some brands to ensure fair competition.
The biggest regulatory hurdle is in the crucial U.S. market, where AB InBev has a roughly 45 percent market share and U.K.-based SABMiller controls a further 25 percent through its MillerCoors LLC joint venture with Denver-based Molson Coors Brewing Co.
MillerCoors employes 2,000 workers at its Golden brewery. Budweiser has operated a brewery in Fort Collins since 1988.
Another potential regulatory headache is China, where AB InBev had an estimated 14 percent volume market share last year, according to Euromonitor. Chinese authorities could require the brewer to exit SABMiller’s joint venture with China Resources Enterprise Ltd., which has 23 percent of the market and produces the top-selling Snow brand.
Dow Jones Newswires contributed to this report.
