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GLOBAL: Analysts cool on SABMiller, Anheuser-Busch InBev bid talk

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Analysts at MF Global have questioned the credibility of a fresh report linking Anheuser-Busch InBev to a takeover bid for its main rival in global brewing, SABMiller.

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SABMiller's shares spiked yesterday (6 October) after a report by Brazilian publication IG.com that said the world's largest brewer, Anheuser-Busch InBev, is mulling an US$80bn bid for the world number two. A deal at this price would mark a new record for the beer industry.

However, it is not the first time that speculation has arisen about a tie-up between the two brewers and many analysts remain guarded. MF Global analysts said today: "We continue to believe that a deal between A-B InBev and SABMiller is possible, but we do not find this article particularly credible due to its failure to cite any sources, the price mentioned raising questions, and the timing indicated seeming unlikely."

While the analysts said that they do see "strategic attractions" to a deal, they questioned the timing. Last month, SABMiller agreed to acquire Foster's Group in Australia and this is not a move likely to interest A-B InBev. "We believe it is relevant that SAB is apparently not able to walk away from the Foster’s deal," said MF Global. "We spoke to a lawyer from the Australian Takeover Panel this morning who confirmed that this is indeed likely to be the case."  

A tie-up between Anheuser-Busch InBev and SABMiller would likely throw up regulatory issues in several markets, and particularly in the US. For a deal to go through in the US, competition authorities would almost certainly require SABMiller to exit its MillerCoors joint-venture in the country with Molson Coors.


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