SABMiller Plc has approached the owners of Heineken NV about an offer for the smaller brewer, to help defend itself against a potential bid by Anheuser-Busch InBev NV, people with knowledge of the matter said.
SABMiller’s preliminary offer was rejected by the family that controls Heineken, the people said, asking not to be identified because the information is private. The offer, made in the last two weeks, would have made the family one of the largest holders in the combined company, said one of the people.
Heineken family members rejected the approach and are resistant to any sale because they want to keep control of the 34 billion-euro ($44 billion) Amsterdam-based brewer, the people said. SABMiller, long been the subject of speculation regarding a takeover by AB InBev, is assessing its next move, the person added, and it’s not clear if it will approach the family again.
“For SAB, a way of preserving their independence is to buy Heineken,” said Matthew Beesley, portfolio manager and head of global equities for London-based Henderson Global Investors Ltd. “It’s easy to underestimate the desire for management teams to be in control of their own destiny rather than to sell their business at a very high price.”
Richard Farnsworth, a spokesman for London-based SABMiller, and Heineken spokesman John Clarke declined to comment.
AB InBev, the Belgian giant that has spent close to $100 billion over the past decade to purchase brews from Corona to Budweiser. By acquiring Heineken, SABMiller would add more than $25 billion in sales and bolster its presence in emerging markets including Africa and Mexico, while helping keep control over its future.
An offer for the world’s third-biggest brewer could rival the largest purchase of a beermaker ever, InBev NV’s acquisition of Anheuser-Busch in 2008. The industry has spent much of the last decade consolidating as brewers fought off sluggish consumer-spending growth and an increasing preference for wine and spirits over beer.
Heineken traces its roots to the 1864 acquisition of a brewery by Gerard Adriaan Heineken. The founding family control the brewer via another publicly traded vehicle, Heineken Holding NV. Shares of the Amstel Light maker, which sells in more than 70 countries, have gained 21 percent this year.
Even with a series of acquisitions in emerging markets, Heineken’s largest region remains western Europe, where it has fought declining demand with new ranges including Amstel Radler and the tequila-infused Desperados.
Over the past 20 years, SABMiller has gone from being primarily a South African brewer, where the company was founded as a purveyor of ale to thirsty gold miners in the 19th century, to the world’s No. 2 by acquisitions from Colombia’s Bavaria to the 2011 purchase of Australia’s Foster’s.
SAB itself has long been seen as the final target for AB InBev in its quest to dominate beer sales across the globe.
SAB CEO Alan Clark told Bloomberg News in January that the case could be made for a tie-up between his company and AB InBev, even though it would probably require divesting some U.S. operations to appease regulators. Sanford C. Bernstein & Co. has estimated a combination of those two would have almost half of global beer profits.
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