SABMiller Plc is to buy South America's No 2 brewer Bavaria SA for $4.8 billion to tap fast-growing beer markets and take on regional leader InBev. SABMiller said on Tuesday the stock and cash deal, which boosted its shares over 10 percent to a new high, is worth $7.8 billion including debt and interests in subsidiaries, and will create the world's second-biggest brewer by volume and profits, behind InBev and Anheuser Busch respectively.
"It's a strategically sound deal, they've paid a sensible price and it's a good opportunity for them," said John Smith, investor director at Brown Shipley.
The world's top beer makers have been scrambling to buy brewers in emerging markets to offset slower growth in developing countries and take advantage of economies of scale. Belgium's Interbrew bought Brazil's Ambev last year to become South America's, and the world's, biggest brewer by volume.
SABMiller said it was buying a 71.8 percent stake in Colombia-based Bavaria from the Santo Domingo family by issuing 225 million shares worth about $3.46 billion. This will give the family a 15.1 percent stake in the combined group.