- This is the script of CNBC's news report for China's CCTV on October 14, Wednesday.
We've been talking about AB Inbev's takeover of SAB Miller for weeks now.
The two companies have now agreed in principle to create the world's biggest brewer.
And that could put it in the top 5 list of the biggest M&A deals ever.
The largest deal to date, by the way, is Vodafone's $183 bn takeover of Mannesmann of Germany, at the peak of the telecom boom in 2000.
But this big beer takeover may not go down easily.
CNBC's Dominic Chu tells us why.
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Okay. So we've got a deal. but sort of its an agreement principle , in other words a tentative agreement for Anheuser-Busch InBev to buy SAB miller. The deal was for the equivalent of around 105 billion dollars. If the deal gets done, it will create an absolute giant in world beer brewing. You got brands like Budweiser & Miller that we already know and it will also bring in big international brands like Stella Artois, Corona and you got Castle Lager from SAB Miller side as well as Peronie. So here is some of the details that you might want to know first there are likely to be a lot of regulatory hurdles. And some estimates are the combined company will control nearly one third of the world's beer market. So will assets sales likely be enough to satisfy global regulators here? The deal will also be for cash with the alternative choice will allow big shareholders like Altria and the Santo Domingo family to take compensation in cash and stocks because of tax reasons. Third ABInBev is also reportedly looking to line up debt financing of around 70 billion dollars to help with the purchase price. Fourth if the deal were to fall apart, AB InBev will pay SAB Miller a 3 billion dollar break up fee, and fifth according to rules in UK, the deal will need to finalized by Wednesday though SAB miller has asked for extension of this deadline until October 28th. So there it is for now, the tentative deal to create the world biggest brew by far. More details are sure to be followed and what could be the very lengthy process for both sides, guys. Back over to you.
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