SAB Sabmiller

By Tripp Mickle 

SABMiller PLC's board on Friday recommended that shareholders approve Anheuser-Busch InBev NV's increased offer of GBP45 a share, bringing an end to several turbulent weeks that jeopardized a more than $100 billion combination of the world's largest brewers.

The board's decision to recommend the deal came on the same day that Chinese regulators approved the merger. The approval by China's Ministry of Commerce, which was expected, was the final regulatory precondition AB InBev needed before moving forward with the transaction.

AB InBev shareholders and SABMiller shareholders now must vote on the deal, which is expected to close this year.

Shares of AB InBev, the world's largest brewer, rose 4.5% in trading in Brussels, while SABMiller's shares added 2.3% in London.

"In reaching its decision, the board has considered the best interests of the company as a whole and has taken into account all salient facts and circumstances. The board has also received extensive shareholder feedback and considered the views of our financial advisers," SABMiller Chairman Jan du Plessis said in a statement. He called the decision as "difficult" and "challenging" in the wake of last month's vote by the U.K. to leave the European Union.

AB InBev on Tuesday raised its offer for SABMiller PLC to GBP45 a share, from GBP44 a share, trying to quell growing unease among SABMiller shareholders after the British pound's plunge. The deal became a target for activist investors and traders after the U.K. voted to leave the European Union last month.

The sweetened offer won support from both of SABMiller's largest shareholders, U.S. tobacco company Altria Group Inc. and Colombia's Santo Domingo family. They both plan to take a cash-and-share proposal that has come under fire in recent weeks after soaring in value because AB InBev shares are priced in euros.

The rest of the board remained concerned about AB InBev's sweetened offer in the wake of the British pound's plunge, a person familiar with the matter said. In an effort to get an independent opinion on the offer, Mr. du Plessis brought on Centerview Partners Holdings LLC and offered it a flat fee to provide financial advice on the new offer, a person familiar with the decision said.

At least two shareholders, including Aberdeen Asset Management PLC, opposed the new offer, but as the week passed, other shareholders embraced it. SABMiller shareholder Twin Capital Management LLC Chief Executive David Simon supported it and said those who opposed it were "being too shortsighted."

The board's recommendation clears the way for the shareholder votes, the next step in the process. Mr. du Plessis said the company will ask the U.K. court to have Altria and the Santo Domingo family vote on the deal as a separate class of shareholders.

AB InBev to sell SABMiller's China businesshas irrevocable commitments in support of the offer from Altria and the Santo Domingo family, as well as from SABMiller's own board of directors with respect to their shares in the company, according to AB InBev Chief Executive Carlos Brito.

Buying SABMiller will give AB InBev access to the fast-growing African beer market as well as certain attractive Latin American markets like Peru and Colombia, while reducing its dependence on slower-growth markets like the U.S. and Brazil.

AB InBev had agreed in March to sell SABMiller's China business to China Resources Beer Holdings Co. The $1.6 billion deal would give the government-controlled brewer SABMiller's 49% interest in the joint venture known as CR Snow and full ownership of Snow, the world's top-selling beer by volume.

Taking over Snow would make China Resources the largest brewer in China, with a 30% market share, according to industry tracker Seema International Ltd. AB InBev has an estimated 18% market share in China, while Tsingtao Brewery has 22%, Beijing Yanjing Brewery Co. has 13% and Carlsberg A/S has 6%.

China's Ministry of Commerce is the fourth and final major regulator to approve the combination of the world's two largest brewers. The deal also was contingent upon approval in the U.S., Europe and South Africa.

Write to Tripp Mickle at Tripp.Mickle@wsj.com

(END) Dow Jones Newswires

July 29, 2016 11:48 ET (15:48 GMT)

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