It was once unthinkable. Two large breweries that didn’t much care for each other and competed tooth and nail for consumer’s beer drinking dollars wouldn’t have even considered the thought of a merger. But today, the unreal is now factual, as Anheuser- Busch InBev and SAB Miller have agreed to merge, forming a massive brewing empire that spans the globe and commands a large percentage of the world’s beer market.
Anheuser- Busch InBev has been eying SAB Miller for some time. Gradually increasing its takeover offer, A-B Inbev finally settled on a price that SAB Miller shareholders found fair and equitable: $68 billion pounds, or approximately $104 billion dollars for the British based company in a stock and cash deal.
With this merger, some of the most popular beer brands in the world are now owned and produced by a single company. Iconic names such as Budweiser, Miller Lite, Bud Light, Peroni, Corona, Stella Artois, Pilsner Urquell, Grolsch, and countless others are now controlled by a one corporate entity.
Total sales of the all- new Anheuser- Busch SAB Miller will approach $64 billion, making it not only larger than any other brewery, but also larger than many established beverage companies such as Coca- Cola. Its presence will be easily felt in the beer aisles of American retailers, where the new company will own about one- third of all the beer brands available in a typical store.
The acquisition, which will be the largest buyout in UK corporate history, is not yet finalized. There will likely be antitrust concerns in the United States and elsewhere as nations grapple with a near- monopoly market condition. One possible concession will be the divesture of MillerCoors, a joint venture between SAB Miller and Molson Coors. There will likely be other concerns, too, and Anheuser- Busch InBev will probably be forced to make other changes to keep markets competitive and satisfy American antitrust regulators.
How this merger will ultimately affect American craft brewers is unclear but it does have small brewers rightfully concerned. It’s also somewhat of a surprise, but not really. America’s big three breweries were once bitter rivals and would have never considered merging or even working together. But times have changed and in a world of increased globalization, we can expect more mergers and more consolidations. There aren’t many really large breweries remaining to buy, but the craft beer market is going strong and the next Anheuser- Busch InBev target is truly anyone’s guess.
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