Four things you need to know ahead of tomorrow’s Megabrew vote
Tomorrow morning, SABMiller shareholders will cast their final votes at a High Court meeting on whether to give the green light to a £79bn takeover from the world’s largest brewer, Anheuser-Busch InBev.
If the tie-up has escaped your attention so far, rest assured: you need to know about it.
To help you catch up, here are four things you need to know in advance about the so-called Megabrew deal.
1. It will be the biggest merger in British corporate history
This was the case for AB InBev’s initial offer, which valued the FTSE 100-listed drink giant at £71bn in a £44 per share offer last year.
The deal swelled to set an even higher record this summer, when AB InBev topped up its offer to £45 per share.
The Belgian brewer was forced to up the stakes after activist shareholders complained that the company’s two biggest investors, Altria and Bevco, had access to a more lucrative joint cash and stock option, which was worth more than £50 per share in the wake of the Brexit vote and ensuing currency fluctuations.
2. The deal is by no means sealed yet.
It hasn’t been plain sailing for AB InBev this year, as the beerhemoth learned when it had to increase its offer.
This means the Megabrew deal passing tomorrow is not a certainty.
Some of SABMiller’s smaller investors are still unconvinced by the higher offer (including Aberdeen Asset Management) and have said point blank they won’t vote in its favour.
Reports have also emerged in recent weeks of minority investors – mostly US hedge funds – that hold around a 20 per cent stake in SAB failing to convert their holdings from options and derivatives to shares with voting rights.
This could give smaller, activist investors the power to derail the deal (eek).
It is also all complicated by the fact that…
3. The decision was split into two votes.
In an unusual move, the High Court granted SABMiller the ability to split its shareholders into two classes last month in another attempt to appease disgruntled investors.
Altria and Bevco – those of the joint cash-and-stock option, who own about 40 per cent of SAB’s overall stock – have already accepted all of the terms of the deal, while the all-cash £45 per share smaller shareholders will vote in another.
AB InBev will need 75 per cent approval from smaller shareholders.
4. If it does pass, a lot of the drinks you associate with SABMiller won’t belong to them anymore.
To gain antitrust clearance for the deal, AB InBev has already sold SABMiller European staples Peroni, Grolsch and craft brewer Meantime to Japan’s Asahi.
It has also said SABMiller’s central and eastern European drinks, which include Pilsner Urquell and Lech, will be offloaded, though little has been said publicly about where the sale stands.
In the US, AB InBev has had to divest SABMiller’s stake in MolsonCoors and has made a number of other concessions to pass it through more than 20 markets worldwide, including China and South Africa.