A Report On The Price Of The Dollar

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Following the Brexit vote on the 23rd of June 2016, the pound fell to 31-year low against the dollar, falling from $1.50 to $1.33 in a matter of hours. The sharp devaluation of the pound against the dollar made AB InBev’s all-cash offer unattractive to SAB’s shareholders, who were to be compensated in sterling, and made the partial share alternative a lot more attractive. Therefore, SAB stakeholders, excluding Altria and BevCo, rejected the offer, threatening to drop the deal.
Eventually, after strenuous negotiations, on the 25th of July AB’s board agreed to raise the offer once more:
- The All-cash consideration was raised by £1 to a total of £45 per SAB share. The revised offer represents a 53% premium to SABMiller’s closing price on
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As a monopolist, it would’ve then had control over the price of beer sold to consumers and therefore an indirect influence on the inflation rate of the countries it serves.
In order to reach an agreement with the numerous Competition Commissions, AB InBev agreed to satisfy various conditions to dilute its post-merger market power in the major countries:
- To appease the U.S. Federal Trade Commission, AB agreed to cede its 58% ownership of the MillerCoors brand to Molson Coors for $12 billion and to accommodate greater competition from craft breweries.
- To appease the European Commission, based in Brussels, AB agreed to give up practically all of the European brands previously owned by SABMiller to the Japanese brewer Asahi, who was looking to expand its business to the European market. Therefore, Anhauser-Bush initially sold Peroni, Grolsh and Meantime to the Japanese brewer for $2.5 billion and, a short time later, also sold another four brands such as Pilsner Urquell and Tiskie for $7.8 billion.
- Finally, to appease the Ministry of Commerce of the People’s Republic of China, Ab Agreed to divest its 49% stake in CR Snow, selling it to CRB for $1.2 billion, its major competitor in the Asian beer market.
AB InBev’s acceptance to divestures in the various markets denotes the company’s little interest in countries other than the African one. Africa
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