SABMiller takeover talk heats up

Industry analysts are speculating that there may be an AB InBev purchase of rival brewers SABMiller, shutting out rumoured moves by Diageo to make the acquisition.

One of SABMiller’s flagship brands: Miller Genuine Draft

The possible takeover of London-based SABMiller by Belgium’s AB InBev has been rumoured for a while, but talk of a deal between industry insiders is picking up pace.

As reported in Columbus CEO, Tom Pirko, president of Bevmark, said: “I think that we’ve come to a break point, a decision point. I think that we’re close now.”

“The chatter has intensified,” said Harry Schuhmacher, publisher of Beer Business Daily.

A combination of the two companies would bring together eight of the 10 leading global beer brands: AB InBev’s Bud Light, Budweiser, Corona Extra, Skol, Stella Artois, and Brahma; and SABMiller’s Aguila and Miller Lite.

Combined, AB InBev and SABMiller would account for about $65 billion (£38bn) in sales and nearly 30% of global beer volume according to reports.

AB InBev already boast a strong range of global brands

The heated speculation comes as Diageo is rumoured to also be looking at SABMiller for a potential merger to tap into the company’s strong trading networks in developing economies.

This would be in line with Diageo’s recent takeover of United Spirits, aimed at opening up similar opportunities in India.

In 2010, Budweiser’s global sales volume rose 1.7% according to reports,  while SABMiller’s market position is strong in regions with high growth potential, including Africa and China.

SABMiller’s strength in Africa, China and other countries where brewers want to grow makes it an equally attractive combination for AB InBev, according to beer industry consultant David Williams.

“I think SABMiller is their number one target,” he said. “InBev wants to be the global, dominant player in beer, and this would help them do that.”