AB InBev's $107B Acquisition of SABMiller Paves Way for More Mergers in Beer Space

The mega merger between beer giants AB InBev (BUD) and SABMiller foreshadows more consolidation ahead in the beer industry, according to one expert. ‘I would expect to see more consolidation from the other players,’ said Warwick Business School Professor John Colley, based in the UK. ‘They usually have to merge to get the same economies of scale, scope and leverage with distribution.’ The deal creates the largest beer company in the world. ‘One in three beers bought globally will be made by this new mega-brewer,’ he added. ‘The top four players are going to have half of the global market. Research shows the less players there are in a particular market, the higher profit and I think that’s where AB InBev and SABMiller are going with this.’ AB InBev will divest its nearly 60 percent stake in Miller Coors, amid the transaction, in a move to please regulators worried about one company having too much market power. TheStreet’s Scott Gamm reports from New York.