Bottoms Up: It’s the Beer Deal of the Century

Photo (cc) by Chris Benseler

How much money does it cost to become the true king of beers?

According to a tentative agreement between two of the biggest beer-makers in the world, it costs about $104 billion.

Anheuser-Busch InBev has agreed to purchase SABMiller for $104 billion, making it the world’s biggest beer-maker, CNN Money reports.

The massive beer merger has been brewing for the past month. CNN Money said SABMiller turned down at least four lower offers from AB InBev. But the latest offer of $104 billion was apparently too good to pass up.

“The board of SABMiller has indicated to AB InBev that it would be prepared unanimously to recommend the all-cash offer,” once it comes to an agreement on the other terms and conditions, the companies said in a news release.

A merger of the two beer-making giants would create a beer empire with 18 of the top 40 beers in the world, including Budweiser, Stella Artois, Corona, Miller Lite, Castle, Chibuku, Carling Black Label and Aguila. The company would have annual revenue of nearly $64 billion, The New York Times reports.

But the proposal isn’t a done deal just yet. In addition to having to work out terms and conditions with SABMiller, the merger also needs approval from the U.S. Department of Justice, CNN Money said. It’s possible that the companies may have to sell some of their assets in the United States before the deal gets a thumbs up from the DoJ.

“The concern is that the combined company would wield too much power in key markets, resulting in higher beer prices for consumers,” CNN Money said.

Consumers aren’t guzzling mainstream beers like they used to. Instead, many beer drinkers are slaking their thirst with craft beers.

At first glance, merging their companies may seem like a way for the big beer-makers to protect their market, but according to Business Insider, the proposed mega-beer-merger could have the opposite effect.

“People take beer very personally,” Brewers Association director Paul Gatza told BI. “When something happens to their favorite beer or their ability to get it, or something helps or hurts a brewer they care about, they internalize it and want to do something about it. People may see [the merger] as a time to rally around their local brewery.”

Are you a beer lover? What do you think of the proposed merger? Share your comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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