As Craft Beer Surges, the World's Two Biggest Beer Companies Weigh Merger

The two largest beer manufacturers in the world may soon merge into a beer behemoth in response to market changes that include an explosive growth of craft brewing in the United States over the past five years.

Anheuser-Busch InBev, which boasts a portfolio that includes Budweiser, Corona, and Stella Artois, revealed on Wednesday that it is interested in acquiring SABMiller, whose stable includes Coors, Fosters, and Miller. A statement from SABMiller confirmed that Anheuser-Busch InBev had informed the company that it intends to make a proposal to acquire it SABMiller.

"No proposal has yet been received," the statement said, "and the Board of SABMiller has no further details about the terms of any such proposal."

If successful, the deal would be the largest merger in beer industry history, with a value of roughly $275 billion. Each company boasts a portfolio of more than 200 international beer brands that, if paired under a single parent company, would command much of the worldwide market.

A deal would likely draw scrutiny from antitrust regulators in the US, however, which could result in SABMiller having to sell off its share of the American company MillerCoors.

Nick Petrillo, an analyst with the market research company IBISWorld, said that much of the industry has consolidating as it has grown in recent years — a movement that is partially seen as a reaction to the rise of craft beer in the US. Since 2010, the craft beer industry has experienced 18.8 percent annualized growth, while the large manufacturers have grown at about 5.6 percent.

"The general consensus is that the reason this is happening is the looming threat of craft beer," Petrillo said. "I think people see the merger as a sign that companies are hemorrhaging money and craft beer is destroying them from within, but I don't think that's true. I think it's just a good business opportunity."

The craft beer revolution has actually been good for the industry, he added. "It's made it healthier and provided consumers with more options," he remarked.

If the two companies were to merge, Petrillo expects that their combined operation would focus on expanding brand holdings while increasing distribution in places like Asia and South Africa. The two companies control about 30 percent of the global beer market, he said. In the US, AB InBev controls 44.9 percent.

Paul Gatza, the director of the craft beer trade group the Brewers Association, said that the deal likely won't affect small craft breweries in the US outside of some possible distribution changes, and he dismissed the notion that craft beer played a large role in forcing the two giants to merge.

"I really think this is just a matter of global finance, of very sophisticated bankers getting their balance sheets in order for the next acquisition," he said. "And craft brewers will keep doing what they do."

He said that the biggest competitors of beer brands large and small are wine and spirits.

Follow Colleen Curry on Twitter: @currycolleen