AB InBev's latest takeover offer has been agreed to in principle by SABMiller bringing a merger of the global beer giants a step closer.
The combined entity will be the world's largest brewer, however the merger will still have to gain regulatory approval.
News of the 'in principle' agreement followed an improved takeover offer of $US104.2 billion ($A144.5bn) from AB InBev this week.
It was the latest in a series of proposals to be put forward by AB InBev in recent weeks, with its earlier offers rejected by SABMiller.
Jeremy Cunnington, senior alcoholic drinks analyst at Euromonitor International said the deal creates a global giant accounting for 29 per cent (assuming US and China divestments) of the 200 billion-litre global volumes, more than three times bigger than its nearest rival, Heineken.
“With all the major M&A targets now taken, and M&A so important to brewers’ growth, it raises the question of where next for global brewers as they bid to carry on growing.”
AB InBev makes Budweiser and Stella Artois, and in Australia, SABMiller owns Carlton & United Breweries (CUB).
If the takeover proceeds, in terms of local impact, it's been predicted that Lion may therefore lose its exclusive local distribution rights to AB InBev brands such as Corona, Stella Artois and Beck’s.
Daniel Grimsey, senior research analyst at Euromonitor International, said while the local impact of switching brands such as Corona, Stella Artois and Beck’s from Lion to Foster’s might look rather small, it works out as 45 per cent of the highly profitable imported premium beer market.
“This segment grew by 14 per cent in value terms in 2014, and is expected to grow at a compound annual growth rate (CAGR) of 4 per cent, in value terms, over the next five years. This is during a period when beer overall is only expected to grow by a CAGR of 1 per cent.”
