AB InBev with SABMIller?
BE ABInbev SABMiller

AB InBev has gone trough a series of mergers and acquisitions in its history, from the first one when Jorge Paulo Lemann and his crew bought Antartica and merged it with Brahma to create what was called at that time Ambev.

The two last acquisition was the American icon brewery Anheuser Bush in 2008 and the Mexican brewery Grupo Modelo in 2013, creating an even bigger company, accounting for nearly 20% of the worldwide beer volumes last year.

This year a lot speculations is rising around the group again. This time the market says that AB InBev is lining up a bid to buy one of its main rivals and the second highest-selling brewer in the world, SABMiller, which would give the group a great market share in the African markets and a larger presence in the South American scene, creating a giant with nearly a third of the global beer volumes.

But this deal would not be cheap: experts calculate that the deal would come to around USD 182 billion!

And it wouldn’t be that simple either: antitrust issues might call AB InBev to sell off SABMIller’s partnership deals in the U.S. and China.

And two agreements with the soft drink giants can give a lot of headache: while SABMiller has a agreement with Coca Cola in Latin America, AB InBev has some similiar deal with PepsiCo in the same region.

But if this merger really happens it would boost the new group sales line by a massive 50%!

The deal would give AB Inbev a great opportunity to enter Africa: While AB Inbev has no meaningful presence in the region, SABMiller dominates the continent, with operations spread over 15 countries, with a further 21 covered by its distribution structure.

The new company would be even stronger in Latin America. Ab InBev already dominates most of the largest markets, such as Brazil, Mexico and Argentina, accounting for more than half the beer volume in these countries. SAB MIller’s acquisition will improve the company’s presence in emerged countries such as Colombia and Peru, with more revenues, due to better unit prices. The combination would not only provide incremental volumes, but also boost the company’s prospects of fast growth in a region that concentrates almost 40% of AB InBev’s production capacity and is the brewery’s most profitable region.

And the acquisition could further widen margens for AB InBev because of the premium brands from the new company which takes a important position in a fast growing market.

Of course we need to talk about synergy benefits that could cut downcosts in a stratospherically way!

Just as a comparison, AB InBev expects to reduce costs in at least USD1billion by the end of 2016, with the merge with Anheuser Bush.

Imagine what they could do with SABMiller?!

Let’s wait and see the next chapters of this non-fictional series!


Totally Beer - contact@totallybeer.com -