Anheuser-Busch InBev , the world's biggest beer maker, has approached rival SABMiller about a takeover that would form a brewing colossus that makes around a third of the beer drunk globally.
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A merged group would have a combined market value of around $270 billion, based on current prices. It would combine AB InBev's dominance of Latin America with SABMiller's strong presence in Africa, both fast-growing markets, as well as strengthening their position in Asia.
Britain-based SABMiller, the world's No. 2 brewer, said on Wednesday that it had been informed by its bigger Belgian rival that it intended to make a proposal but it did not have any further information about the terms.
"The board of SABMiller will review and respond as appropriate to any proposal which might be made," it said. "There can be no certainty that an offer will be made or as to the terms on which any offer might be made."
AB InBev responded by confirming its approach to SABMiller's board. "There can be no certainty that this approach will result in an offer or agreement, or as to the terms of any such agreement," it said.
Shares in SAB, which owns such brands as Peroni, Grolsch and Pilsner Urquell, were up 21 percent. AB, which has Budweiser, Stella Artois and Corona, was up 7 percent before trading was suspended.
Speculation of such a mega-merger has often surfaced in a global market increasingly dominated by big multinationals.
One key area of concern to regulators would be the combined group's market share in the United States, where AB InBev has almost half the market and SABMiller's joint venture with Molson Coors just under 30 percent.
(Reporting by Kate Holton and Philip Blenkinsop; Editing by Paul Sandle and Pravin Char)