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Brussels/London - There are significant antitrust hurdles after SABMiller [JSE:SAB] accepted an offer worth about R1.4trn from larger rival Anheuser-Busch (AB) InBev on Tuesday.
WATCH: Everything you need to know about SABMiller in 60 Seconds
The SABMiller board said it would give its blessing to a fifth proposal from its sole larger rival. If it goes through, the deal would rank in the top five mergers in corporate history and be the largest takeover of a UK company.
The antitrust hurdles would be particularly difficult in the US, where the companies would have about 70% of the beer market.
A deal would likely result in Denver-based Molson Coors acquiring SABMiller's 58% stake in their US joint venture.
WATCH: What AB InBev’s R1.4trn acquisition of SABMiller means
Any merged group may also have to sell interests in China, where SABMiller's CR Snow joint venture with China Resources Enterprise is the market leader.
It would also force change in the wider beverage sector, with SABMiller a large distributor of Coca Cola, while AB InBev has ties with rival PepsiCo.
READ: SA Union to oppose takeover and Treasury on tax erosion alert
Bernstein Research beverage analyst Trevor Stirling said that he rated the chances of the deal going through at 80%, with antitrust issues being the main risk.
"There is a chance that due diligence throws up something nasty," he said, but added that SABMiller would be unlikely to have accepted AB InBev's approach if they knew of a major problem.
Morningstar's Gorham said that, of remaining assets, the beer business of Guinness and spirits maker Diageo looked particularly attractive, with Heineken a possible buyer.
Carlsberg's new management is likely to have its hands full with sorting out problems in Russia for some time.
"With all the major M&A (merger and acquisition) targets now taken, and M&A so important to brewers’ growth, it raises the question of where next for global brewers as they bid to carry on growing," said Jeremy Cunnington, a drinks analyst at Euromonitor International.
After repeated rejections to its lower proposals, AB InBev said on Tuesday it was willing to pay £44 in cash per SABMiller share, with an alternative for cash and shares set at a discount and limited to 41% of SABMiller shares.
The parties have agreed that AB InBev would pay a break fee of $3bn to SABMiller in the event the transaction fails due to the significant regulatory issues or because AB InBev shareholders do not back it.
