SABMiller shares are diving on fears its $250 billion merger could tank
Shares in beer maker SABMiller dived at the market open in London on Tuesday on fears that its $250 billion (£165 billion) mega-merger with rival US brewer ABInBev could collapse.
SABMiller, which makes beers such as Peroni and Pilsner Urquell, dived 2% at the start of trade and is currently down 1.7% at 8.26 a.m. BST (3.26 a.m. ET).
It comes after a report in the New York Post said that the expected $250 billion merger between SABMiller and ABInBev, which makes beers such as Stella Artois, Budweiser, and Corona, could crash before it even gets off the ground.
SABMiller announced mid-September that ABInBev was preparing a bid for the company and ABInBev has until October 14 to get a formal bid in. The deal would leave a third of the world's beer under the control of one company.
But the Post is reporting that "SAB Chairman Jan du Plessis and his management team are leaning toward fighting the expected ABI takeover bid," quoting a source with knowledge of the situation.
The same report says ABInBev won't go hostile with its bid either, meaning if management reject the offer it won't take its plan directly to shareholders to try and get them to overrule the management's decision.
Things haven't been helped by a disappointing trading update from SAB this morning. The strong dollar meant revenues for the first half of the year fell by 9% against last year as SAB lost money converting sales back into its preferred currencies.
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