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JSE cheers historic SABMiller deal

Cape Town – SABMiller [JSE:SAB] has shot up by almost 11% on Tuesday to R811 on the JSE after it was announced that Anheuser-Busch (AB) InBev agreed to buy SABMiller for £68bn (about R1.4trn).

At 09:46 SA time, SABMiller had increased by R79 from its closing price of R732 on Monday, while in London the primary listing increased by 9.3%.

READ: AB InBev buys SABMiller for R1.4trn in record deal

Under the terms of the possible offer, SABMiller shareholders will get 4 400 pence a share in cash, with a partial share alternative available for about 41% of SABMiller shares.

The price is about 50% above SABMiller’s closing share price of £29.34 on September 14, the last business day before renewed speculation of an approach from AB InBev.

AB InBev offered 4 400p/share in cash for a majority of the shares in its nearest competitor, gaining brands such as Peroni and Grolsch, and giving it control of about half the industry’s profit.

READ: SABMiller braces for a culture of no beer, no lunch, no fun

When SABMiller rejected a previous offer on October 7, it said in a press statement that the “approach has been timed opportunistically to take advantage of SABMiller’s recently depressed share price”.

“SABMiller is the crown jewel of the global brewing industry, uniquely positioned to continue to generate decades of standalone future volume and value growth for all SABMiller shareholders from highly attractive markets,” said SABMiller chairperson Jan du Plessis last Wednesday.

“AB InBev needs SABMiller, but has made opportunistic and highly conditional proposals, elements of which have been deliberately designed to be unattractive to many of our shareholders.”

READ: Why SABMiller is not falling for takeover bid

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