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The U.S. Senate Judiciary antitrust subcommittee will conduct a hearing to talk on Anheuser-Busch Inbev SA’s intentions to acquire SABMiller plc (ADR)(OTCMKTS:SBMRY). The two companies stated that they had finalized on terms for the agreement that is projected to top $100 billion.

Sen. Mike Lee, a Utah Republican reported the hearing along with the Senator Amy Klobuchar. No other details or date of the hearing were disclosed. The stock price of Altria Group Inc (NYSE:MO) recorded a new 52-week high on October 16 as it stands to gain from the merger of beer giants SABMiller and Anheuser-Busch.

The factors

On October 13, SABMiller finally accepted to a takeover proposal from Belgium-based peer Anheuser Busch for nearly $100 billion after rejecting numerous proposals. While common shareholders will be entitled to receive $67.59 a share, the two biggest investors of SABMiller will receive a cash and shares alternative valued at nearly $60 per share.

The proposed price represents more than 30% premium to SABMiller’s stock closing price as on September 14. The premium permits these two shareholders to get a higher stake in the new combined entity transaction than they would get in the case of a merger-of-equals where premium was not seen.

The details

It should be noted that Altria, the shareholder of SABMiller currently has 27% stake in company. It sold 9% of its holdings to South African Breweries plc back in year 2010 for the Philip Morris International Inc.

SABMiller highlights non-core operations and some investors are of view that a takeover proposal from Anheuser-Busch would be company’s remarkable opportunity to capitalize on the SABMiller holdings at a maximum profit. Altria Group, which has always been in the favour of the merger deal, can then use the funds to reinvest in its core operations or return value to shareholders.

SBMRY

SABMiller plc (ADR) (OTCMKTS:SBMRY) ended the last trading session with a minor loss of 0.29%. The volume of the day at 271,000 was higher than the daily average of 189,000, providing no particular clue about the possible price action in the coming few days. On the other hand, the price is trading in a sideways range at the higher levels and the dry volume may be taken as an indication of the absence of any serious profit booking or distribution by the smart money. The short term uptrend remains safe above $59 levels.

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