A deal between the parent companies of Miller and Budweiser is likely to be altered by federal regulators. Belgian-based Anheuser-Busch InBev’s $106 billion cash offer on Tuesday won over the U.K.-based SABMiller, which had previously rejected five offers.
“It wasn’t really a surprise, it was just a matter of when they got to the right price point, and apparently they got to it,” said Madison College marketing professor Steve Noll.
But, Noll said, the U.S. Department of Justice and Federal Trade Commission are unlikely to approve the merger without requiring SABMiller to sell its 58 percent share of Miller-Coors. “I think that what’s going to happen is the MillerCoors company is going to be taken out of this deal, and will become its own entity,” he said. “And the big question is, will it operate as it’s own entity, or is another beer company going to step in there and gobble that up?”
The deal is between the parent companies of Miller and Budweiser. “They’re the Pepsi and Coca Cola of the beer industry,” Noll said. “Between the two of them, they had about 70 to 80 percent of the market share, and then about 10 to 12 percent is micro-brewers. I wonder if there is a larger micro-brewer out there who might want to make this as an acquisition.”