SABMiller Board Backs Sweetened AB InBev Offer

The board of London-listed drinks giant SABMiller (Xetra: BRW1.DE - news) has supported a final takeover offer from Anheuser-Busch InBev, the brewer of Budweiser.

Under the enhanced cash deal, which must be voted on by shareholders, £45 per share would be paid - valuing the company at approximately £79bn.

However, some of those investors believe SABMiller, whose brands include Peroni and Bulmers, has been undervalued given its growth in developing economies.

The offer has been described as "final" by AB InBev - and under UK takeover rules, this means the deal cannot be improved if rejected by shareholders.

AB InBev, which is based in Belgium, had made a cash offer of £44 a share last November.

Although this amounted to a 50% premium on the share price, the value of the pound has slumped following the EU referendum, making the deal less attractive.

If shareholders approve the sweetened proposal, it will pave the way for one of the world's biggest-ever takeovers.

SABMiller's chairman, Jan du Plessis, described the new offer as "at the lower end of the range of values considered recommendable" - and said this had made the board's decision more challenging.

"In reaching its decision, the board has considered the best interests of the company as a whole and has taken into account all salient facts and circumstances," he added.

The board has also decided that Altria and Bevco, which collectively own about 40% of SABMiller, will be treated as a separate class of shareholders in the vote.

On Friday, AB InBev was given a major boost in its bid to overtake its rival after regulators in China gave the mega-merger the green light.

That approval is on the condition that AB InBev sells SABMiller's 49% stake in China Resources Snow Breweries, as there had been fears that the newly merged company would otherwise have a stranglehold on the lucrative Chinese market.

Earlier, AB InBev reported operating profits of $4bn (£3bn) for the second quarter - an increase of 4.3%.

Other brands in the Belgian brewer's stable include Corona, Stella Artois and Beck's (Other OTC: UBGXF - news) .