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[Bud & Becks] Project Barium - InBev’s negotiations with SABMiller

SABMiller has quietly indicated to Belgium’s InBev that it would formally consider a bid pitched at £15.00 a share or more, valuing the business at £22.6bn, FT Alphaville has learned.

The London-listed brewer has told representatives of InBev, which is trying to lead a final round of global consolidation in the drinks industry, that it would prefer a so-called merger of equals under a British ‘top-co’ structure, creating a £45bn brewing giant with market-leading positions in 35 countries.

InBev, on the other hand, according to sources with a close knowledge of its thinking,  favours a straightforward takeover, retaining its Belgium-based status and keeping the complex structure of shareholder agreements between its Brazilian managers and aristocratic Belgian founding families in place.

Any transaction with SABMiller is being considered as a distinct “Plan B” to a preferred takeover of Anheuser Busch in the US. In any case, SAB has told InBev that it is unable to engage in meaningful discussions until it completes its US beer joint venture with Molson Coors in the US.

The indicated base negotiation price of £15.00 was cited before news of InBev’s plans was revealed here on Friday.

Alongside “Project Aluminum,” the Anheuser takeover plan, InBev’s advisers, lead by Lazards and Sullivan & Cromwell, have dubbed the SAB alternative “Project Barium.” While SAB and InBev are seen as a perfect fit in terms of management skill and entrepreneurial zeal, the potential synergies, put at around $800m annually, are significantly below the $1.4bn being privately forecast in an Anheuser takeover.

Shares in SAB, which jumped 7 per cent to £13.09 on Tuesday, opened float on Wednesday.

Related links:
InBev seeks to woo Anheuser - FT
InBev weighs its options - FT analysis
Barium - Wikipedia definition

Article Series - Bud & Becks

  1. InBev targets takeover of Anheuser-Busch
  2. The InBev strategy
  3. Finding $50bn in funds
  4. Golden beer barrels - the (potential) Anheuser exit packages
  5. InBev's plans for Anheuser's theme parks
  6. A white knight for Anheuser?
  7. Project Barium - InBev's negotiations with SABMiller
  8. Dear August, an unsolicited, non-binding proposal
  9. What price a bear hug?
  10. That touchy, feely, creepy beer bid
  11. Beer brawl - InBev signal hostile intentions for Anheuser-Busch
  12. What now for the prodigal uncle?

This entry was posted by Paul Murphy on Wednesday, May 28th, 2008 at 8:59 and is filed under M&A. Tagged with , , , , . You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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Comments

  1. May 29   19:41 Posted by engenhariadealimentos » Blog Archive » Cervejarias SAB Miller e InBev ensaiam megafusão [report]

    […] O mercado cervejeiro anda agitado. Segundo revelou o Financial Times, a britânica SAB Miller, maior cervejaria do mundo em volume de produção, fez uma discreta sondagem à InBev, segunda maior, sobre uma eventual fusão, que resultaria numa gigante de quase US$ 90 bilhões e líder de mercado em 35 países. A proposta ainda não-oficial da SAB surge uma semana depois de a InBev, resultante da fusão entre a belga Interbrew e a brasileira AmBev, ter anunciado seu interesse pela americana Anheuser-Busch, fabricante da Budweiser. Por enquanto, segundo o FT, a InBev prioriza as negociações com os americanos, deixando a proposta da SAB como plano B. Isso porque a cervejaria britânica exigiria uma direção conjunta sediada em Londres, o que desmontaria a intrincada estrutura da InBev, sediada na Bélgica e com forte participação de executivos brasileiros. […]

  2. May 29   4:01 Posted by H Schuhmacher [report]

    Methinks this is a leak to push A-B shareholders toward a deal.

  3. May 28   18:48 Posted by Deal Journal - WSJ.com : Afternoon Reading: A U.S. Brands Clearance Sale? [report]

    […] Meanwhile, it seems InBev has come up with a Plan B if its acquisition of A-B meets too much resistance. SABMiller has quietly indicated to InBev that it would be open to a takeover bid of £15.00 a share or more, reports the Financial Times’s Alphaville blog. […]

  4. May 28   15:32 Posted by Mound City Money » Blog Archive » How about a beer merger without A-B? [report]

    […] FT Alphaville, the blog that broke the story of a possible Inbev offer for Anheuser-Busch, now says that things are pretty far along for Inbev’s Plan B: a merger with SABMiller instead. […]

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