The world's largest brewer Anheuser-Busch InBev has proposed to take over SABMiller, the second-largest in the business globally, which sells under brands such as Foster's and Haywards 5000. The Belgian firm has approached the board of its biggest rival for a possible “combination of the two companiesâ€, SABMiller said on Wednesday.
The deal would face intense scrutiny given the dominant position of the two firms in the business. If the deal goes through, the merged entity would produce one-third of the world's beer. Based on Tuesday's share price, the combined value of the two firms is likely to be at least $230 billion.
London-listed SABMiller said AB InBev had given notice that it intends to make an offer for the company.
However, “No proposal has yet been received and the board of SABMiller has no further details about the terms of any such proposal," it added.
Further, SABMiller stated that AB InBev must announce a firm intention to make an offer by October 14.
Belgium-based AB InBev makes Budweiser and Bud Light among other labels with major operations around the world. Currently, it has 155,000 employees in 25 countries. AB InBev is listed in Brussels and New York.
SABMiller operates across six continents and employs 69,000 people in more than 80 countries including Australia, Zambia, Colombia, Czech Republic, South Africa and the US. The brewing giant makes over 200 beers including Peroni Nastro Azzurro, Pilsner Urquell and Grolsch.
In the year ended March 31, 2015, SABMiller sold 324 million hectolitres of lager, soft drinks and other alcoholic beverages, generating group net producer revenue of $26.28 billion and EBITA of $6.3 billion.
It also happens to be the second-largest beer maker in India and is better known for selling under brands such as Foster's, Haywards 5000, Knockout and Royal Challenge.
Heineken, the third-biggest brewer globally, had recently hiked its stake in India's top player United Breweries that makes labels like Kingfisher.