The world’s biggest brewer Anheuser-Busch InBev today said it and takeover target, British rival SABMiller, had agreed to extend its massive offer by a week to allow for further discussions.
InBev, the giant behind top lager brands like Beck’s, Budweiser and Stella Artois, said it had completed a review of the SABMiller business and confirmed the terms of its bid, worth more than USD 120 billion when debt is included.
“In order to allow SABMiller and AB InBev to continue their discussions with respect to other aspects of the transaction ... SABMiller has requested the (authorities) to extend the relevant deadline until 5:00 pm on November 4, 2015,” a statement said.
Britain’s takeover panel had agreed to the request, it said in a statement.
Earlier this month, InBev, which also brews Hoegaarden and Leffe beers, said it would pay 44 pounds per share (60.92 euros, USD 67.32) in cash for SABMiller which counts Foster’s, Miller Genuine Draft and Peroni among its brands.
The London-based SABMiller had rejected four previous offers, saying they undervalued the company and were opportunistic.
InBev’s efforts were made more difficult by SABMiller’s complex ownership, with some major shareholders in favour of the takeover and others against.
InBev said in the statement that completion of the deal would require “unanimous recommendation” by SABMiller’s board, which includes Altria, the former Philip Morris which owns the iconic Marlborough cigarette brand.
InBev is eager to tap into booming markets in Africa and China where SABMiller’s joint venture produces Snow — the world’s best selling beer by volume.
InBev itself was formed in 2008 by the merger of InBev and US brewing giant Anheuser—Busch and since then has aggressively expanded.
The deal comes at a time of growing pressure for consolidation in the brewing industry where craft beers made by smaller independent firms are increasingly popular.
InBev reported a sharp fall in second quarter profits owing to weak economic conditions in several markets.
SABMiller earlier this year bought London—based craft beer company. Meantime while Dutch beer giant Heineken bought half of US—based Lagunitas.
Winning over SABMiller, which dates back to the 19th century Johannesburg gold rush, would broaden InBev’s reach in the world’s fastest—growing beer markets.
The new combined company would produce one in three beers sold globally, according to market research group Euromonitor International.
Analysts said that given is size, the deal is likely to attract close scrutiny from the regulators.