AB Inbev and SABMiller deal will create a 'Megabrew'

The coming together of Anheuser-Busch InBev and SABMiller, dubbed Megabrew, will serve one pint of beer in three.

764-Budweiser-634

"Megabrew" will serve one pint in every three

The world's two biggest beer makers have joined forces. Anheuser-Busch InBev, the top brewer by sales and producer of Stella Artois and Budweiser, has agreed a £68bn takeover of UK-listed SABMiller, whose brands include Peroni and Grolsch. SABMiller succumbed to AB InBev's fifth offer, creating a new group dubbed "Megabrew" that will sell one pint of every three served in the world.

What the commentators said

With consumption flat in developed markets, Africa has huge potential: people still only drink an average of 8.8 litres of beer a year. In Europe the figure is 55. Still, tapping the market isn't straightforward. Local moonshines remain popular as they're cheaper and stronger than beer. Half of all alcohol drunk in Africa is illegal, estimates the World Health Organisation.

Africa is "where the deal will stand or fall", agreed BreakingViews.com'sRobert Cole. AB InBev will have to spend heavily on marketing and infrastructure. That will require CEO Carlos Brito to "show some new skills". His speciality is cost cutting which, of course, is also required to make the deal stack up.

SABMiller executives will certainly do well out of this deal, said James Moore in The Independent. "The losers will be just about everyone else." Many employees are in for the chop and customers will lose choice. Then again, "in terms oftaste the difference between one industrially produced lager and another" amounts to little. "Try a craft beer tonight," said Alistair Osborne inThe Times. "They're better anyway."

Recommended

Should you buy Vodafone shares, or steer clear?
Share tips

Should you buy Vodafone shares, or steer clear?

Vodafone grew revenue by 4% and profit by 11% last year, and offers investors a 6.4% dividend yield. So should you buy Vodafone shares? Rupert Hargrea…
17 May 2022
Melrose Industries: a British manufacturer that is well-placed for recovery
Share tips

Melrose Industries: a British manufacturer that is well-placed for recovery

Melrose, the aerospace and automotive manufacturer, has been hit by the pandemic, but the shares are unduly cheap says David J Stevenson.
17 May 2022
Avoid easyJet shares – there are better airlines to invest in
Share tips

Avoid easyJet shares – there are better airlines to invest in

EasyJet used to be one of Europe’s most impressive airlines. But now it is facing challenges on all fronts and losing out to the competition. Rupert …
16 May 2022
Britain’s ten most-hated shares – w/e 13 May
Stocks and shares

Britain’s ten most-hated shares – w/e 13 May

Rupert Hargreaves looks at Britain's ten-most hated shares, and what short-sellers are looking right now.
16 May 2022

Most Popular

Get set for another debt binge as real interest rates fall
UK Economy

Get set for another debt binge as real interest rates fall

Despite the fuss about rising interest rates, they’re falling in real terms. That will blow up a wild bubble, says Matthew Lynn.
15 May 2022
Is the oil market heading for a supply glut?
Oil

Is the oil market heading for a supply glut?

Many people assume that the high oil price is here to stay – and could well go higher. But we’ve been here before, says Max King. History suggests tha…
16 May 2022
High inflation will fade – here’s why
Inflation

High inflation will fade – here’s why

Many people expect high inflation to persist for a long time. But that might not be true, says Max King. Inflation may fall faster than expected – and…
13 May 2022