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ABInBev & SAB Miller: the unacceptable face of mergers and acquistions?

In Uncategorized on July 27, 2016 by kmflett

ABInBev and SABMiller: the unacceptable face of mergers and acquisitions?

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If you have some interest in the Beerage as opposed to just beer you will certainly know that last year brewing giant ABInBev agreed a deal to takeover SAB Miller to create a mega-brewing giant.

It may surprise some to learn that capitalism has rules- not to protect people like us obviously- but to regulate its own activities. Since the agreement in principle various Regulatory bodies around the world have been looking at it and both companies have agreed to dispose of some brewing brands they owned to avoid creating monopoly markets.

The deal has now hit a problem caused by the change in the value of the pound after Brexit. These things happen- capitalism is a volatile system. The specific problem is that while SABMiller are a South African based company they are quoted on the London Stock Exchange (not 5 minutes from my City office where I’m tapping this out).

This means that last year’s takeover deal now looks a bit undervalued. Accordingly ABInBev have increased their offer and made it final. That means they can’t increase it further.

According to reports not all SABMiller shareholders are happy about the increased offer and may vote it down. One analyst in the FT (27th July) is quoted as seeing this as ‘high stakes poker’.

In essence SABMiller has two groups of shareholders, some large industrial concerns that own around 40% of shares and other, smaller, investors who have the rest. The FT reports that the two appear divided on the latest offer and there may be a move in the UK Courts to enforce a separate vote on the offer from the two constituencies. And you thought the Labour Party leadership contest was complex..

Aside from those of us who are interested in how capitalism does or does not work why should this matter to beer drinkers?

We might recall at this point that ABInBev owns Camden Town Brewery and SABMiller sold Meantime as part of the merger.

Big business can impact on small scale craft drinking

 

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