SABMiller accepted a takeover proposal at the fifth time of asking on Tuesday after Anheuser-Busch InBev, the world's largest brewer, set out a cash and share package worth 68 billion pounds ($104.4 billion).
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After repeated rebuttals from its next largest rival, AB InBev said it was willing in principle to pay 44 pounds in cash per SABMiller share, with a partial share alternative set at a discount and limited to 41 percent of the SABMiller shares.
SABMiller said it had indicated to AB InBev that its board would be prepared to accept the offer and said it had asked for a two-week extension to the deadline set for its rival to announce a firm intention to bid. The new deadline is Oct. 28.
The parties have agreed that AB InBev would pay a break fee of $3 billion to SABMiller in the event the transaction fails to close as a result of regulatory issues or because AB InBev shareholders do not back it.
The new offer unveiled on Tuesday surpasses a Monday proposal set at 43.50 pounds in cash.
The partial share alternative remains, designed for SABMiller's two main shareholders, cigarette-maker Altria and the BevCo company of Colombia's Santo Domingo family, who own 40.5 percent of the UK-based brewer.
Were they to accept the discounted alternative and all other shareholders took cash, the offer would be worth 68 billion pounds ($100 billion).
The deal would rank in the top five mergers in corporate history and would be the largest takeover of a UK company.
The new group would brew almost a third of the world's beer, combining AB InBev's Budweiser, Stella Artois and Corona lagers with SABMiller's Peroni, Grolsch and Pilsner Urquell.
AB InBev would add certain Latin American and Asian breweries to its already large presence and, crucially, see it enter Africa for the first time.
(Editing by Paul Sandle and David Clarke)