British Investors Stand to Lose Out on Big Beer Money

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As AB InBev edges closer to acquiring SABMiller, fall-out from “Brexit” threatens share value. In what will become one the top five merger and acquisitions ever, the deal brings together two global beer giants.

Tom Barkley, professor of finance practice, offers some insights into the AB InBev/SABMiller merger.

“This deal has been in the works for some time but it has been delayed due to global regulators,” said Professor Barkley. “SABMiller has been selling off some of its premium labels, including Grolcsh, Peroni and Meantime, to help satisfy regulator requirements.”

He adds that even with the sell-off, this new conglomerate will own nine of the top 20 beers globally by volume, all brands currently owned by Budweiser and Miller.

“The combined entity will be the largest brewer by all measures,” he said. “Likely the brand names will remain the same so the beers we all know and love will still be on store shelves.”

“This is a huge deal, one of the largest in history and shareholders worldwide will benefit but I feel sorry for the British shareholders of SABMiller. When this deal was initially announced, the pound was worth more than it is today, due to ‘Brexit.’ Even though they’ve increased the offer price, the shares are worth less. In U.S. dollar terms, what used to be worth $67 is now worth about $58.”

Tom Barkley

Tom Barkley is the director of M.S. in finance program and professor of finance practice at Syracuse University's Martin J. Whitman School of Management. He received his PhD from Warrington College of Business at the University of Florida. His research interests include market microstructure, asset pricing, derivatives, risk management, capital markets and international finance.
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