LPC-AB InBev lining up $70 billion debt for SABMiller offer

Reads 1377 • Replies 13 • Started Tuesday, September 29, 2015 8:44:46 PM CT

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Message X beers 172 º places 1 º 20:44 Tue 9/29/2015 Just in case you missed it: http://finance.yahoo.com/news/ab-inbev-talks-raise-70-163014036.html Now that’s a lot of cash. I’m contemplating going on shark tank and asking Mark Cuban to fund me for an alternate offer.
Message b3shine P beers 12184 º places 372 º 20:50 Tue 9/29/2015 AB InDebt
Message bytemesis P beers 15319 º places 1595 º 21:10 Tue 9/29/2015 How is that not an antitrust problem?
Message TimE P beers 8459 º places 409 º 21:59 Tue 9/29/2015 $70bn would be one of the biggest acquisitions in a long time anywhere in any industry. That is massive. Tim

Message Oakes P admin beers 30664 º places 1135 º 23:30 Tue 9/29/2015 Originally posted by bytemesis How is that not an antitrust problem? It would be. I ran the numbers and the brewing industry is considered concentrated by the usual DoJ test, the HHI. That means a merger cannot increase concentration by very much. In the US, they can’t get approach without shedding a lot of market share in order to make the math work. Shedding the arrangement with MolsonCoors doesn’t get it done, either. They’d have to sell off more. Apparently they’d have antitrust issues elsewhere, too, such as in China. I imagine they have a plan for this, but it will take a lot of work to make the numbers work for the DoJ.
Message Brigadier P beers 4930 º places 334 º 12:01 Wed 9/30/2015 This move has to be aimed at increasing share in places like China, India, and other markets where growth is still possible. From what I can glean by my last casual glance at the European and US markets things are pretty flat (although if you asked me if I would be OK with billions in profits and a marketing budget that dwarfs the operating budgets of all but maybe Sam Adams I’d not have any complaints). If it does get approved I could imagine them spinning off the brands like Goose Island, Elysian, etc into a separate portfolio. Maybe the ultimate end game is that high profile brands become commodities in much the same way that Diageo, Beam, and a few others occasionally trade labels to better balance their own goals.
Message Oakes P admin beers 30664 º places 1135 º 13:28 Wed 9/30/2015 From what I understand this deal would have antitrust issues in China, too. SABMiller owns China Resource Breweries, with the thousand iterations of the Snow brand, and AB InBev has Budweiser and Harbin with strong national shares as well. I know they want to get bigger in China, but I’m not sure how that plays out over there. I suspect it’s not as transparent as it is in the US with respect to getting antitrust approval. Can’t doubt that AB InBev wants CRB, though, and would part with the rest of its Chinese portfolio to get it.
Message OnTheTrail beers 1271 º places 37 º 18:37 Wed 9/30/2015 Originally posted by bytemesis How is that not an antitrust problem? They will sell SABMILLER properties in the US to satisfy US antitrust, and in Europe to satisfy EU. There is no global antitrust. They will keep the vauable African and Latin American pieces of SABMILLER.

Message callmemickey beers 4561 º places 47 º 18:52 Wed 9/30/2015 Originally posted by OnTheTrail Originally posted by bytemesis How is that not an antitrust problem? They will sell SABMILLER properties in the US to satisfy US antitrust, and in Europe to satisfy EU. There is no global antitrust. They will keep the vauable African and Latin American pieces of SABMILLER. Yup. As explained in this series of articles ( http://marketrealist.com/2015/09/big-beer-acquisition-implications-us-market/) the most likely scenario would be for Molson Coors to buy out SABMiller’s stake in their MillerCoors joint venture... effectively keeping the Miller and Coors brands separate from ABInBev in the US.
Message DAJTX beers 23 º places 6 º 21:36 Wed 9/30/2015 Originally posted by bytemesis How is that not an antitrust problem? The Federal Govt may very well force them to divest some brands to comply with antitrust laws. Some speculation is that Molson Coors may stand to pick up some of those lines.
Message bytemesis P beers 15319 º places 1595 º 22:21 Wed 9/30/2015 Very interesting. Thanks for that!