Talks have ended and agreements have been reached on the terms of the deal that'll see AB InBev acquire SABMiller.
A new company called Newco will be formed and will acquire SABMiller. AB InBev will then merge with it so that Newco becomes the new holding company for the combined group.
The deal values SABMiller at £71bn.
Each SABMiller shareholder will be entitled to receive £44 per share in cash – almost twice the £29.34 share price on 14 September, the last day of trading before talks of an offer began.
Carlos Brito, CEO of AB InBev said: 'We are excited about our agreement on the terms of a recommended acquisition of SABMiller to build the world’s first truly global brewer. We believe this combination will generate significant growth opportunities and create enhanced value to the benefit of all stakeholders. By pooling our resources, we would build one of the world’s leading consumer products companies, benefitting from the experience, commitment and drive of our combined global talent base. Our joint portfolio of complementary global and local brands would provide more choices for beer drinkers in new and existing markets around the world.
'Moreover, a combination of our two companies would allow us to make a greater and more positive impact on the communities in which we live and work, drawing on our shared commitment in this regard.'
SABMiller chairman Jan du Plessis added: 'AB InBev's offer represents an attractive premium and cash return for our shareholders, and secures earlier delivery of our long-term value potential, which is why the Board of SABMiller has unanimously recommended AB InBev's offer.'
AB InBev also announced it's to sell SABMiller's interests in MillerCoors, a US-based joint venture between Molson Coors and SABMiller in the US and Puerto Rico – which means AB InBev won't own SABMiller's US assets as they currently exist, hereby solving some competition issues. In practical terms, it means Molson Coors will gain full ownership of Miller brands outside of the US (including the global Miller brand itself), and will retain rights to MillerCoors brands in the US.
This particular deal is worth $12bn (c£7.9bn) and is conditional on the completion of the SABMiller/AB InBev acquisition.
'We will continue to proactively address any regulatory concerns regarding our combination with SABMiller in other relevant markets,' Brito said.
While the deal is expected to be completed in the second half of 2016, AB InBev has agreed to pay a break fee of $3m in case the transaction falls through because of regulatory issues.