AB InBev eyeing another major acquisition

AB InBev, the largest brewery company in the world and producer of brands such as Stella Artois, Budweiser and Beck's, may be preparing to buy its closest rival in one of the largest mergers in history.

According to media reports, the Belgian family-controlled AB InBev has its eye on London-based SABMiller as its next major acquisition, following its purchase of Mexican brewer Grupo Modelo in June of this year.

AB InBev was formed in 2008 when InBev purchased Anheuser-Busch Companies – a US family brewing business, with roots dating back to 1852.

Last year AB InBev had revenues of $39.8 billion (€28.9 billion).

The interests of the families that founded Interbrew and AmBev – two companies from which InBev was formed – are represented through two separate Luxembourg based companies.

Each family has the right to appoint four of the board's 12 members.

Analysts have pegged the cost of the SABMiller deal at about $100 billion (€72.5 billion), which would make it the fifth-largest corporate acquisition ever.

Commentators told Reuters the deal had been a possibility for some time, but had been shelved while AB InBev focused on the Modelo deal, adding the merger was likely, given the company's track record of frequently making large acquisitions.

The proposed merger, isn't likely to be greeted warmly by regulators because of the monopoly it would give AB InBev in the global brewing and soft drinks market – it already has a 20% share of the global brewing industry, while SABMiller holds 10%.

Before AB InBev could complete the Modelo deal it was obliged to divest the rights to the Corona and Modelo beer brands in the US, and experts have said it's they would have to shed some of SABMiller's American beer and soft drinks brands to complete the deal.

The acquisition of SABMiller would be advantageous to AB InBev because it would give it greater access to smaller Latin American markets like Columbia and Peru, as well as Africa. 

The deal could be completed as early as next year, but neither company has yet commented on the possibility.