SABMiller and AB InBev froth higher on potential tie-up

“No proposal has yet been received and the board of SABMiller has no further details about the terms of any such proposal,” it said.

SAB said there can be no certainty that an offer will be made or as to the terms on which any offer might be made.

The statement followed recent press reports suggesting the companies were working on a combination. Speculation of such a deal has been rife for years, but recent reports indicated that AB InBev’s largest shareholder, private equity group 3G, was now ready to engage in talks.

AB InBev also made a statement on Wednesday confirming its approach and saying it wants to work with SABMiller on a deal.

“AB InBev confirms that it has made an approach to SABMiller’s board of directors regarding a combination of the two companies,” it said. “AB InBev’s intention is to work with SABMiller’s board toward a recommended transaction.”

“The deal would make strategic sense to capitalise on the growth opportunity which arguably has more to run in Africa/emerging markets,” said Atif Latif, director of trading at Guardian Stockbrokers. “With the prospects of double-digit growth continuing, managing currency exposure and the synergy possibilities from this deal it makes sense and investors will be pleased with the news today.”

Investec said an offer of up to £42 a share is feasible.

“With expected synergies of up to $2bn and certain disposals that would give AB InBev around 10% EPS accretion. On a stand-alone basis - no bid, no speculation - we see SABMiller worth around £29/ a share,” it said.

As far as antitrust issues are concerned, Investec said any problems can probably be overcome through the sale of SAB’s stakes in MillerCoors and CR Snow.

At 1150 BST, SABMiller shares were up 20% at 3,623p, while AB InBev shares were up 8.3% at EUR102.25.