Pound’s plunge takes R125bn whack out of SABMiller takeover value
Fin24 - Jun 30th 2016, 16:07
London - US investors who own SABMiller [JSE:SAB] shares have more reason than most to rue Britain’s vote to leave the European Union. The resulting plunge in the UK currency has cut the dollar value of Anheuser-Busch (AB) InBev's takeover offer for SABMiller by $8.5bn (R125.5bn).
AB InBev, the world’s largest beer maker, agreed in October to buy London-based SABMiller in a cash-and-stock deal that’s currently valued at about £75.9bn. That’s about $101.9bn at Wednesday’s exchange rates, down from $110.4bn on Thursday, before the outcome of the referendum was known.
SABMiller investors based in the US, who hold about 20% of the company’s floated shares, will thus get much less of a payoff than they expected if the pound remains near its recent low against the dollar - the lowest in 31 years - when the deal closes.
AB InBev chief executive officer Carlos Brito has guided investors to expect the deal to close in the second half of the year.
“I can see from a US investor perspective the translation means he’ll feel hard-done by,”Andrew Holland, an analyst at Societe Generale, said by phone.
The value of the takeover offer also has fluctuated with the price of AB InBev’s shares, which are listed in euros in Brussels, and the pound’s exchange rate with the euro.
AB InBev has agreed to pay £44 a share in cash for a majority of SABMiller’s shares, and a mix of cash and stock for the rest that’s now worth about £48.78 a share.
AB InBev’s takeover of SABMiller is the largest deal of 2015 after Pfizer and Allergan abandoned a $160bn merger.
SABMiller and AB InBev declined to comment on the fluctuating value of the deal.
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