AB InBev (BUD) Stock Up on $106 Billion SABMiller Acquisition, Jim Cramer: A Great Deal

AB InBev (BUD) stock is increasing after the company reached an agreement to acquire SABMiller (SBMRY) in a $106 billion transaction.
By Amanda Gomez ,

NEW YORK (TheStreet) -- Anheuser-Busch InBev (BUD) - Get Report stock is rising 0.95% to $119.48 in mid-morning trading on Wednesday after the brewer issued a formal offer to acquire SABMiller (SBMRY) in a stock and cash deal valued at $106 billion, according to Reuters.

AB InBev is offering 44 pounds per share in cash and a partial share alternative of 0.483969 restricted shares and about 3.78 pounds in cash per share.

The partial share alternative was accepted by Altria Group (MO) and BEVCO, which together hold about 40.45% of SABMiller shares.

AB InBev expects to achieve at least $1.4 billion in annual synergies by 2020.

The company has agreed to a $75 billion syndicated loan to acquire SABMiller, making it the largest commercial loan ever, Reuters reports.

AB InBev has secured financing with several banks, including Banco Santander (SAN), Bank of America/Merrill Lynch (BAC) and Deutsche Bank (DB).

The transaction is subject to shareholder and regulatory approval, but is expected to close in the second half of 2016.

Additionally, AB InBev agreed to sell SABMiller's 58% stake in MillerCoors to Molson Coors Brewing Co. (TAP) in a $12 billion transaction to gain regulatory approval in the U.S.

The sale is conditioned upon AB InBev's acquisition of SABMiller.

TheStreet's Jim Cramer, portfolio manager of the Action Alerts PLUS charitable trust portfolio, has this to say about the offer: "A great deal for all companies involved. [AB InBev] will have amazing scale and be able to tower over its suppliers. [Molson Coors] is doing equity to fund the deal and I bet the deal might actually come at higher prices." 

BUD

data by

YCharts

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

Loading ...