from the drinks business SABMiller Agrees to £70 Billion Takeover (At today’s exchange rate, that’s $107.85 Billion!)
Jason, do you think the Feds will let this deal be completed? I read a short blurb about the offer/deal yesterday and beyond the staggering price to be paid, there is a $3 billion dollar payment due to SABMiller if AB does not finalize the deal.
With enough divestiture to (pretend to?) insure competition, yes. But that’s a BIG if . . .
. . . IF Molson Coors doesn’t step up.
I think this is a bad deal everyone except senior management and the investment bankers. I emailed the Department of Justice at firstname.lastname@example.org to express my concerns. I generally think these mergers are bad, but there are a lot of issues in distribution which will likely negatively effect craft beer. Here’s the text I wrote:
“I am writing to express my grave concern over the proposed merger of
SABMiller and AB InBev. According to the Wall Street Journal, this
combination would give the new entity 46% market share in the US and
30% worldwide. The combined company would be too big and wield too
much market power. I believe it is bad for the beer business and the
combined entity would limit my choice as a consumer. The combined
entity with it’s even greater economies of scale would also pose an
even more grave risk to the growing craft beer market which employed
more than 424,000 people and contributed $55.7 billion to the US
economy in 2014, according to the Brewer’s Association.
Please stop this merger. It is bad for the economy.”
Molson and Miller are already North American partners, and not independently competing with each other. Bud is counting on Molson taking over Miller In North America, so market shares don’t really change. Watch the Coors stock price . . . Bud’s likely motivation is overseas markets where it can combine operations with Miller’s, cutting combined costs there while gaining combined share.