The Mega Powers Collide

In 2002 South African Breweries (SAB) purchased the Miller Brewing Company. The company changed its name to the incredibly clever, SAB Miller. Two years later in 2004 South American based Am-Bev merged with Belgium-based Interbrew and created the also cleverly named global giant InBev. This latter merger it should be noted dethroned Anheuser-Busch as number one in the world in global beer sales. A few years later due largely to poor management on the end of Anheuser Busch, InBev took over the Budweiser parent creating megabrewer Anheuser-Busch InBev or AB InBev.

With AB InBev flashing their beers all over America, SABMiller decided they needed a leg up, so they looked to another huge American brewer, the Coors Brewing Company. Coors, not to be left out of the merger fun merged with Canadian based Molson Brewing in 2005 creating, you guessed it, MolsonCoors. SAB Miller and MolsonCoors started a joint venture in 2008 to win back those American livers and created MillerCoors.

Trust me, I know this sounds like the beginning of the bible with who begat who, but stay with me, this shit is about to get good.

So here we are in 2015, AB InBev owns over an astounding 20% share of the global beer market. They attribute that largely to their impressive bevvy of more than 300 brands. Bass, Budweiser, Beck’s, Stella Artois, Michelob being just a few of them. In a distant second we have SAB Miller accounting for nearly 10% of the world’s beer consumption with brands like Miller, Grolsch, Peroni, Castle (a big South African brand). Coming in 3rd is Heineken followed by Carlsburg and down in 7th place globally is our friend MolsonCoors.

Sometimes 1/5th of the world’s beer consumption just is not enough, so AB InBev with the tenacity of a high school quarterback on prom night has tried multiple times to get SAB Miller in the backseat. On the sixth attempt SAB Miller finally gave in when the 106 Billion dollar offer was too good to turn down. If this merger is approved by the regulatory commission and shareholders, AB InBev SABMiller (I can’t wait to see what ingenuous name they create) will provide about a 3rd of the world’s beer. That is staggering. That is not just a megabrewer that is a brewing diety.

If this merger does not go through however, AB InBev has to give SAB Miller 3 Billion dollars for their time. If only we all got such consolatory perks for having our time wasted. However, if this deal does go through, there will be a lot of regulations and changes, one of the biggest clearly being the withdrawal of SAB Miller from joint venture MillerCoors. Coors would have the option to purchase SAB Miller’s shares, but my guess is that 3rd place Heineken would take the plunge and pick up the pieces.

Time will tell, this will have ramifications throughout the beer world, but there should not be much impact to the bar world. Miller and Bud will still be on tap, the only difference is that now regardless of which one you pick, the money’s all going to the same place.

Cheers

Jim Kohl