SABMiller Pauses Integration Work With Anheuser-Busch InBev

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Photo: Justin Tallis/Agence France-Presse/Getty Images

LONDON— SABMiller SBMRY -2.60 % PLC has paused its integration work with Anheuser-Busch InBev BUD -3.89 % NV, according to a person familiar with the matter, as the London-based brewer’s board consults with shareholders over whether the revised offer AB InBev broached on Tuesday is acceptable.

The pause in integration doesn’t necessarily signal that the SABMiller board will oppose the new offer. Still, news of the halt worried investors, sending AB InBev shares down 2.3% in Brussels trading. SABMiller shares were down 0.7% in London.

In the spring, SABMiller had begun working with AB InBev on integrating finance, technology, procurement and certain supply-chain functions, the person said. The company on Tuesday decided to halt this work after AB InBev surprised SABMiller by revising its offer without consulting with the No. 2 brewer on the new terms, and also said the revised offer was final.

Related

  • AB InBev Raises Offer for SABMiller
  • SABMiller to Consider Weakness of Sterling in Deal Review
  • AB InBev’s SABMiller Deal Still Faces Hurdles

SABMiller’s board is now consulting with shareholders and plans to meet to consider the revised offer before making a final recommendation. The board will consider a range of factors, including how the pound’s weakness has eroded the all-cash portion of the deal’s premium and what SABMiller’s valuation would be if the bid from the world’s largest brewer falls through, the person familiar with the matter said.

A decision by SABMiller’s board could come within days, the person said.

Belgian-based AB InBev boosted its cash offer to £45 ($59.12) a share from £44 a share to appease SABMiller shareholders, who had watched the value of the offer fall along with sterling. The pound sank after the June 23 vote by Britain to leave the European Union.

That sterling decline has deflated the value of AB InBev’s cash-only offer, intended for most shareholders, compared with a separate cash-and-shares offer aimed at SABMiller’s two biggest shareholders, U.S. cigarette maker Altria Group Inc. MO -1.68 % and Colombia’s Santo Domingo family.

Aberdeen Asset Management, ADN 0.41 % a large SABMiller shareholder, on Tuesday characterized AB InBev’s revised offer as “unacceptable” following the drop in the pound, saying the deal unfairly favors investors who can opt for the cash and stock offer.

But other SABMiller shareholders, such as New York-based investment-management firm Twin Capital Management LLC, said they want to the deal to go through. “I think people are being too shortsighted,” said Twin Capital Chief Executive David Simon in an interview on Wednesday. Mr. Simon, who said his firm owns more than a million shares of SABMiller, characterized AB InBev’s offer as “fair.”

Another large SABMiller shareholder, South Africa’s Public InvestmentCorp.—Africa’s largest pension-fund manager—in an emailed statement said it is “still in discussions with SABMiller on the offer price.” It declined to make its view public at this point.

Saabira Chaudhuri at saabira.chaudhuri@wsj.com





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