Pound’s Plunge Takes $8.5 Billion Whack Out of Megabrew’s Value

  • SABMiller’s U.S. holders looking at smaller payoff from sale
  • U.K. currency fell to 31-year low after U.K. vote to quit EU

U.S. investors who own SABMiller Plc shares have more reason than most to rue Britain’s vote to leave the European Union. The resulting plunge in the U.K. currency has cut the dollar value of Anheuser-Busch InBev NV’s takeover offer for SABMiller by $8.5 billion.

AB InBev, the world’s largest beermaker, agreed in October to buy London-based SABMiller in a cash-and-stock deal that’s currently valued at about 75.9 billion pounds. That’s about $101.9 billion at Wednesday’s exchange rates, down from $110.4 billion on Thursday, before the outcome of the referendum was known.

SABMiller investors based in the U.S., who hold about 20 percent of the company’s floated shares, will thus get much less of a payoff than they expected if the pound remains near its recent low against the dollar -- the lowest in 31 years -- when the deal closes. AB InBev Chief Executive Officer Carlos Brito has guided investors to expect the deal to close in the second half of the year.

“I can see from a U.S. investor perspective the translation means he’ll feel hard-done by,” Andrew Holland, an analyst at Societe Generale, said by phone.

The value of the takeover offer also has fluctuated with the price of AB InBev’s shares, which are listed in euros in Brussels, and the pound’s exchange rate with the euro. AB InBev has agreed to pay 44 pounds a share in cash for a majority of SABMiller’s shares, and a mix of cash and stock for the rest that’s now worth about 48.78 pounds a share.

AB InBev’s takeover of SABMiller is the largest deal of 2015 after Pfizer and Allergan abandoned a $160 billion merger.

SABMiller and AB InBev declined to comment on the fluctuating value of the deal.

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