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from Breakingviews:

SAB/Heineken could leap antitrust hurdles

By Robert Cole

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A $130 billion Anglo-Dutch beer monster could leap antitrust hurdles. Heineken has rebuffed a takeover approach from SABMiller as “non-actionable.” As you might expect from a combination of the world’s second- and third-biggest brewers, there are major competition concerns. But these could be fixed and the result would be an emerging markets titan. The rejection suggests family control of Heineken is the real sticking point.

To be sure, the protagonists would have to swallow a couple of flagon-sized problems. Numbers from Datamonitor Consumer, the market researcher, show that SAB-Heineken would pour 51.9 percent of the beers in Italy, 68.7 percent in the Netherlands and 72.8 percent in Poland. Both are big in Africa. Meanwhile, Heineken’s shareholding in India’s United Breweries would create a headache on the subcontinent and SAB’s stake in Efes might give a merged entity more strength in Russia than regulators could stomach.

All this adds complexity. But it need not be a deal-breaker. For example, the duo could create a single bundle of European assets, such as Grolsch and Moretti, and sell them on. Asian brewers such as Kirin or Asahi might be keen.

from Breakingviews:

Coke investment reveals half-empty idea bottle

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Coca-Cola’s latest investment reveals its idea bottle to be half empty. The $180 billion soda giant is paying $2.2 billion for 17 percent of Monster Beverage, a maker of trendy energy drinks. It goes to show how even a global powerhouse with significant distribution and marketing advantages can struggle to keep ahead of upstart rivals. At least Coke got the deal formula right.

from Breakingviews:

U.S. drought could spark economic water warfare

By Kevin Allison and Antony Currie

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The withering drought afflicting California and the southwest United States could spark economic warfare over water. Scarce rains have left large swaths of the country dry for, in some areas, several years. That’s happening as industries from beverages to semiconductors grow concerned about whether they will have adequate access to water in the future. For cities and states situated around the Great Lakes, as well as water technology firms, it presents a flood of opportunities.

from Breakingviews:

Diageo throws money at Indian empire-building

By Robert Cole and Una Galani

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Diageo is engaging in some expensive empire-building in India. An under-powered tender offer meant an earlier attempt to take control of Vijay Mallya’s United Spirits was only partially successful. Now the world’s biggest spirits maker has more than doubled the price it is willing to pay, offering $1.9 billion to raise its stake to 54.8 percent from 28.8 percent.

from Breakingviews:

AB InBev deserves premium-strength rating

By Robert Cole

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

AB InBev seems to pump as much cash as beer out of its business. It is the world’s biggest brewer, responsible for the Budweiser, Stella Artois and Corona brands, and even with a 2 percent annual decline in volume it poured 426 million hectolitres of grog in 2013. That’s enough to fill 17,000 Olympic-sized swimming pools.

from Breakingviews:

Suntory lives up to motto with $16 bln Beam bid

By Rob Cox

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

For a Japanese corporation, Suntory Holdings has an especially aggressive corporate slogan: “Yatte Minahare,” which roughly translates as “Go For It.” That sums up Suntory’s willingness to pay $16 billion, or a hefty 20 times EBITDA, for the U.S. distiller of Jim Beam, Maker’s Mark and other tipples. That number won’t be lost in translation for Diageo, Pernod Ricard or others who might also covet Beam.

from Breakingviews:

AB InBev moves fast to keep Mexico prize

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Anheuser-Busch InBev is moving fast to save its Mexican ambitions. The world’s biggest brewer has rejigged its $20 billion buyout of Grupo Modelo two weeks after regulators objected, worrying that U.S. drinkers would suffer. In response, AB InBev is relinquishing any claim to Modelo’s beers stateside. That could prevent a long legal fight, while keeping the deal’s rationale largely intact.

from Breakingviews:

AB InBev setback may hasten last round of beer M&A

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A deal setback for Anheuser-Busch InBev may ironically hasten a last round of consolidation in beer. The U.S. Department of Justice opposes AB InBev’s $20 billion plan to buy out the other half of Grupo Modelo, the Mexican group behind Corona. The world’s largest brewer may yet find a workable compromise. But if not, an obvious plan B exists: the long-rumoured takeout of SABMiller.

from Breakingviews:

Diageo’s M&A machine misfires with Jose Cuervo

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The sun is setting on Diageo’s ambitions to be a big shot in tequila. A generous reading is that Diageo remains disciplined about deals. But letting Jose Cuervo go is a meaningful setback in the group’s largest market.

from Breakingviews:

Diageo’s India splash won’t get Kingfisher flying

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Diageo’s $2.1 billion acquisition of United Spirits has helped India’s largest liquor company and its chairman Vijay Mallya. But hopes that Kingfisher Airlines will fly again simply because the grounded carrier’s flamboyant founder has raised some cash look overoptimistic.

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