SABMiller rejects $104B US takeover offer from InBev

SABMiller has rejected a $104 billion US takeover offer from Anheuser-Busch InBev, heading off a merger of two of the world's biggest brewers, at least for now.

Belgian-based InBev, maker of Budweiser, Corona and Labatt, had raised its offer for its rival to $104 billion earlier Wednesday, a third bid to negotiate a takeover price after making its initial offer on Sept. 16.

But British-South African SABMiller, owner of Miller and Foster's, rejected the offer as too low. It is a partner with Molson in a U.S. joint venture called Miller Coors.

"AB InBev is very substantially undervaluing SABMiller," said SABMiller chairman Jan du Plessis.

Talk of a union that would create a brewer controlling 31 per cent of the world's market for beer had driven the price of SABMiller shares 22 per cent higher.

But in recent days they have fallen again as investors speculated that the deal might be off. Shares rose again today.

Still talking 

The SABMiller board's answer doesn't mean a merger is a non-starter, but that more negotiation is needed to reach acceptable terms.

The Financial Times is reporting investors are split over whether to accept a merger.

The revised proposal made Wednesday valued SABMiller at £42.15 ($64 US) in cash, plus a "a partial share alternative available for approximately 41 per cent of the SABMiller shares."

Its initial bid valued the company at £38 ($57.80) per share. The second offer was for £40 ($60.80) per share.

Molson, Labatt under one roof

The sheer size of the deal is likely to invite scrutiny by regulators. Among international brewers, only Heineken comes close in size, with about nine per cent of the market.

In Canada, InBev owns Alexander Keith's, Lakeport and Kokanee brands as well as giants such as Stella Artois, Beck's and Michelob. It hopes to expand into Australia and Asia with the merger.

SABMiller also owns Grolsch, Castle and a number of Latin American brands.