AB InBev recently announced that they have came to an agreement with SABMiller to acquire the company for a reported $107 billion. This new business entity will be the largest beer producer in the history of the world. What this means for craft beer is still undetermined and remains to be seen, but this new company is basically a monopolization of the beer industry. They are now the Microsoft of brewing, before Microsoft had to help foster Apple that is. The brewing conglomerate will now be responsible for almost 33% of the world’s beer supply, and nearly all of the beer in the United States.
Thankfully, this deal requires that SABMiller will have to relinquish their 58% interest and 50% interest in MillerCoors to Molson Coors for a reported $12 billion. This will make Molson Coors the full owners of Miller and all of its products outside of the United States, as well all the current products that the company offers within the United States. That means that Molson Coors will also own the Miller brand name, including Miller, Miller High Life, and Miller Light. The company is hoping that this overly generous part of the deal will be enough to make the government declare that they don’t have a monopoly on the United States beer market.
By acquiring SABMiller, AB InBev hopes to expand their business in the African and Asian markets. It should be effortless to expand their reach in Africa, as SABMiller already does a large amount of business in the country. As for Asia, we’ll have to wait and see how the world’s largest beer conglomerate performs.
If you want more info on the food and beverage industry, check out the Harvill Industries blog.