UK-based SABMiller, the world's second-largest brewer, on Tuesday accepted a revised £68 billion (over $104 billion) takeover offer from bigger Belgian rival Anheuser-Busch InBev, after spurning four previous proposals.
The deal, if it clears anti-trust authorities, will create a company selling close to one in three beer bottles around the world with annual revenue of about $64 billion.
The two companies have not yet formally finalised the terms of the offer, but this development means they have extended the deadline for a firm offer by AB InBev until October 28.
The agreement came after weeks of discussions and just before the October 14 deadline for AB InBev to make a formal offer under British takeover rules or not approach SABMiller again for up to six months.
SABMillerâs board has now agreed to unanimously recommend to its shareholders AB InBevâs proposal to pay £44 a share, with a partial share alternative available for about 41 per cent of SABMiller shares.
Under the terms of the latest proposal, the all-cash offer represents a premium of about 50 per cent to SABMillerâs closing share price of £29.34 on September 14, when the first report about the impending talks came out. AB InBev had originally offered £38 a share and raised the bid three times, including once last week, only to be turned down, before reaching the agreement.
US-based tobacco giant Altria Group Inc and Colombiaâs Santo Domingo family together own 41 per cent of SABMiller.
SABMiller employs 69,000 people in more than 80 countries. The proposed merger would bring some of the worldâs most popular beers under one roof, including Budweiser, Corona and Stella Artois from AB InBev, and Miller Lite, Peroni Nastro Azzurro and Grolsch from SABMiller.
The deal would also face intense scrutiny from regulators given the dominant position of the two companies in the business.
AB InBev has 155,000 employees in 25 countries. The company is listed in Brussels and New York. The deal would help it get a bigger play in emerging markets, especially Africa, as also markets like India.
In the year ended March 31, 2015, SABMiller sold 324 million hectolitre of lager, soft drinks and other alcoholic beverages. It generated group net producer revenue of $26.28 billion and earnings before interest, tax and amortization of $6.3 billion.
It is the second-largest beer maker in India and is better known for selling under brands such as Foster's, Haywards 5000, Knockout and Royal Challenge.
The third-biggest brewer globally is Heineken, which recently hiked its stake in India's top beer maker United Breweries that sells Kingfisher beer.