Earlier today, Anheuser-Busch InBev and SABMiller secured an “agreement in principle” for AB InBev to acquire SAB. Here's a breakdown of the proposal.

  • SAB shareholders will receive GBP44 per share in cash. The cash offer follows two earlier formal proposals of GBP42.15 last week and GBP43.50 yesterday. It also represents a 50% premium on SAB's share price on 14 September, the day before ABI announced its intention to launch a takeover bid
  • The company's largest shareholders Altria Group (27%) and the Santo Domingo family's BevCo (14%) have been offered a “partial share alternative”. The package comprises 0.483969 unlisted shares in ABI and GBP3.7788 in cash per SAB share owned by the pair
  • The PSA represents an increase on the GBP2.37 offered last week and the GBP3.56 proposed yesterday (the amount of shares offered as part of the deal remained the same throughout) – a premium of around 33% to the share price on 14 September
  • The shares in the PSA will be restricted stock with a five-year lock-up, worth an equivalent GBP39.03, based on the share price at close of trade yesterday
  • According to analysts at Nomura the cash offer implies an EV/EBITDA of 16.1x, based on SAB's fiscal-2015 estimated EBITDA. The PSA proposal implies an EV/EBITDA of 15.5x
  • SAB's board has requested an extension of the deadline introduced by The Panel on Takeovers & Mergers in the UK, which had been set for 1700 BST tomorrow. The Panel has granted a postponement to 28 October
  • The two companies will now begin formal discussions, with ABI conducting due diligence. Both ABI and SAB will look to get approval for the transaction from their largest shareholders
  • Analysts at Stifel Nicolas expect the deal to complete by the end of April next year, “as financing for cash consideration is readily available and US and China regulatory review should be simple”

The road to MegaBrew – How SABMiller and Anheuser-Busch InBev arrived at today's historic deal

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