AB InBev SABMiller takeover deal has plenty of losers

Outlook

(Cate Gillon/Getty Images)

The analysts’ always said it would take £44 a share to get SABMiller to signal its surrender to InBev. On this occasion they were right. With the big guns on its shareholder register having made their views clear, SAB’s board had little choice but to surrender when InBev finally bit the bullet and said it was minded to show them the money. In the period between the first approach and the delivery of the knockout blow we’d been treated to a string of phantom offers from InBev accompanied by attempts to mobilise SABMiller’s shareholders on its behalf.

It was an unattractive charade that served only to fatten the fees of its bloated corps of advisers, and it might have lasted even longer had the Takeover Panel not been given the power to force stalkers of InBev’s ilk to either put up or shut up.

Now we’ve reached the end game, one that should lead to the creation of a brewing behemoth with nearly a third of the global market after SAB’s shareholders have taken their cash (or opted for a rather unattractive stock-based alternative worth considerably less). They clearly think they’re on to a winner with the offer. SAB’s executives certainly will be when they get paid off.

The losers will be just about everyone else. Workers at the two companies will lose their jobs as InBev gets to work on extracting the synergies it will need to justify the price it is paying. Customers will lose choice, particularly if the giant decides to rationalise which brands it sells in some of its markets although, to be fair, in terms of taste the difference between one industrially produced lager and another doesn’t amount to all that much.

Those who stand between the company and its customers, the pubs, and the retailers and the wholesalers, may also face a squeeze, as will competitors. They’ll all be minnows by comparison. It’s not even clear this won’t be bad for InBev’s shareholders. The history of mega-deals like this is not a happy one.

Regulators in the countries in which the company operates ought to be able to see the danger and take action. But, aside from a few disposals for the sake of form, they probably won’t. Because there is one other group of winners from this deal: the lobbyists who will whisper sweet nothings in the ear of governments with the aim of keeping those regulators quiet.