AB InBev to buy SABMiller

Anheuser-Busch InBev NV agreed to buy SABMiller Plc. for about 68 Million pounds, raising its bid after several rejections to clinch a record industry deal that will bring one out of every three bears sold worldwide under a single company.

The Budweiser maker will pay 44 pounds a share in cash for a majority of the shares in its nearest competitor. Belgian-Brazilian group AB InBev, the maker of Budweiser and Stella Artois lagers, struck a deal with the maker of Foster’s and Grolsch at the fifth time of asking. The deal is in the top five mergers in corporate history and be the largest takeover of a UK Company.

SABMiller two largest shareholders, Altria Group Inc. and Bevco Ltd, can receive cash and stock valued at 39.03 pounds a share for their stakes, which account for 41% of the company. They won’t be able to sell the shares for five years and will have the right to nominate directors. After years of speculation, the deal has been hastened by the impact of slowing economies in the emerging markets of China and Brazil.

SABMiller, the world largest brewer, claimed the previous bids undervalued the company, upping the pressure, ahead of regulatory deadline by which time its rival would have to make an official offer or walk away for at least six months.

American Reynolds buys Lorillard

Reynolds American is the second largest tobacco company in the United States. It markets a variety of tobacco products including cigarettes and moist snuff. Its products include Camel, Pall Mall, Kool, Winston, Salem, and Capri. Lorillard is also an American Tobacco company marketing cigarettes under the brand names Newport, Maverick, Kent, True, and Max.

In July 2014, Reynolds American announced it would buy Lorillard Tobacco Company for roughly $25 Billion. Merger between two of the world biggest cigarette maker also include the sale of the top-selling US e-cigarette to Britain’s Imperial Tobacco group. The deal, which gives Reynolds control of Newport Menthol cigarettes, strengthen the combined company’s hand in competing for a shrinking pool of smokers and sets up a three way battle with Marlboro maker Altria Inc. for the e-cigarette market. After this merger, their market share would be 42%, second only to Altria group’s 51%.

Lorillard’s expertise in the electronics cigarette market will be of special interests to Reynolds, which is looking to capitalize on the growing demand for e-cigs in the US and elsewhere. The traditional tobacco industry has been shrinking as more and more people become health conscious and switch to healthier and smokeless electronic cigarettes. Analysts expect the world market for electronic cigarettes to grow 24.2% every year until 2018.

Lorillard had acquired Blu Ecigs, a privately held Charlotte N.C-based company in 2012, and SKYCIG, a UK based e-cig maker, to gain a significant edge in the e-cigs market. Altria group had acquired Green Smoke’s e-vapor business this year, and is preparing a nationwide launch of its MarkTen e-cigs. Philip Morris International Inc, formerly a unit of Altria Group, has also launched its Marlboro e-cig product, which vaporized real tobacco instead of burning it.

Currently, Reynolds’s only presence in the market for e-cigs is through its Vuse brand, which is effectively sold in only two US states. Following the merger, the company will be looking for a more defined foothold in the e-cigs market. Altria is also getting into e-cigarette market with its own subsidiary, NuMark.