SABMiller rebuffed by Heineken
SABMiller has considered a possible combination with rival beer maker Heineken, in a deal that would have brought together two of Europe’s biggest brewers and help it fend off a takeover bid from rival AB InBev.
However, the London group’s interest was thwarted before discussions – even of an informal nature – could begin, with Heineken making clear that it was not interested in considering a sale, according to people familiar with the matter.
Dutch-listed Heineken has been sought after by rival beermakers for years but remains a difficult target. Its controlling shareholders – the De-Carvalho family with a 50.1 per cent stake held by publicly traded Heineken Holding – are not interested in a sale of the fourth-generation business.
Bloomberg News reported that SABMiller had made a preliminary offer in the past two weeks and that it was rejected.
It is unclear whether an offer was made by SABMiller or it approached Heineken to see if it would be interested in a possible deal. Both companies declined to comment.
Heineken, the maker of Amstel, Birra Morretti and Newcastle Brown Ale, has a market capitalisation of €34.2bn. Its shares have risen 21 per cent this year as its strategy of establishing premium beer brands gains traction with consumers and investors.
The move by SABMiller comes amid speculation that AB InBev, the world’s largest brewer, is targeting a megadeal for SABMiller, the maker of Peroni, Grolsch and Miller Lite.
The top four brewers – AB InBev, SABMiller, Heineken and Carlsberg – account for 49 per cent of global beer sales and 60 per cent of operating profit, according to Bernstein Research. Bankers have said for months that there is one more round of consolidation likely to happen in the industry.
Takeover talk has increased in part because other consumer sectors such as food, spirits, healthcare and tobacco have seen a big pick-up in mergers and acquisitions.
Shares in SABMiller, the eighth biggest company on the FTSE 100 with a market capitalisation of £55bn, have climbed 27 per cent since February amid expectations that AB InBev is likely to attempt a deal.
A deal for SABMiller would allow AB InBev, which makes Budweiser, Stella Artois and Corona, to address its problem of a slowdown in growth in beer volumes. It would also allow AB InBev to gain a foothold in Africa and other fast-growing markets where it lacks a strong presence.
SABMiller’s two biggest shareholders are Altria, the US tobacco group, which has a 27 per cent stake, and Colombia’s billionaire Santo Domingo family, with 15 per cent.