LONDON (AP) — Budweiser brewer Anheuser-Busch InBev raised its takeover bid for SABMiller to 70.4 billion pounds ($108.2 billion) Monday in its latest effort to win backing for its plan to create "the first truly global beer company."
AB InBev has been trying for nearly a month to get its hands on SABMiller but its previous offers have met with resistance. It will be hoping that its latest offer, which values SABMiller at 43.50 pounds a share — 3.2 percent more than its previous bid and 14 percent higher than its initial offer — will finally win the day.
SABMiller declined to comment on the fresh offer.
Shares of London-based SABMiller rose 1 percent to 37 pounds a share on reports of the improved bid.
Were an agreement to eventually emerge, the combined company would have 31 percent of the global beer market, dwarfing the next biggest player, Heineken, which has 9 percent of the market. A combined company would have total annual sales of $73.3 billion.
Market leader AB InBev already has six of the world's largest beer brands. In addition to Budweiser, brands it owns include Stella Artois and Beck's. SABMiller, which is based in London, is the maker of rival brand Miller Genuine Draft, along with other names like Peroni and Milwaukee's Best.
Crucially for AB InBev, a deal would allow it to venture out more into the African and Australian markets where its might has yet to be felt in the way it is in Europe, North Africa and Asia.
Tensions between the two companies have risen since the first offer was announced Sept. 16, with AB InBev accusing SABMiller's board of failing to engage meaningfully in negotiations. SABMiller has argued that the previous offers undervalue the company.
Any merger, however, is expected to draw scrutiny from regulators worried about how it might hurt competition and lead to higher prices for shoppers.
The beer industry has been consolidating for the past decade as it seeks to gain more clout with suppliers, distributors and retailers in a market that's seen overall slowing sales in the U.S.
In the U.S., overall beer sales rose just 0.5 percent last year, while mainstream brands like Budweiser were hurt by smaller beer brands with more cachet. Sales of craft beers climbed 17.6 percent in 2014 and accounted for 11 percent of the $101.5 billion market, according to the Brewers Association, a U.S. trade group of more than 1,900 brewers.
"The big macro brands that are really the cash drivers are now in decline," said Duane Stanford, editor of Beverage Digest, a trade publication. "People are more interested in diversifying and having more beverage choices. They want different flavors, more rich beers, more imported beers."
SABMiller met with investors Friday to underscore its strength as an independent company to head off the takeover attempt.
It said the meetings focused on the company's accelerating growth and a stepped-up cost-cutting program that will target $1.05 billion of savings by March 2020, more than double the previous goal of $500 million by 2018.
"We are continuing to remove duplication across markets, bringing specialist expertise in areas like procurement under one roof, and standardizing common processes," CEO Alan Clark said in a statement. "It results in our markets being freed up to concentrate on what they do best — growing revenue with local consumers and customers."
AB InBev has until 5 p.m. (1600 GMT) Wednesday to make a formal offer under U.K. takeover rules. It is possible to continue discussions after that point, but SABMiller would have to request the extension.
