UK-listed SABMiller has bought Bavaria, Latin America's second largest brewer, for US$7.8bn.
The announcement comes three months after rumours first began circulating that the UK group was preparing to make an offer for Bavaria, which had long been viewed as a potential target by brewers on both sides of the Atlantic.
The deal sees SABMiller effect a share swap with Santo Domingo family which founded the Colombia-based operation and owns 75 per cent of the stock.
The result of the transaction will mean the family will in turn control a 15.1 per cent stake in SABMiller.
Bavaria has leading market positions in Colombia, Peru, Ecuador and Panama. Brands in these territories include Aguila, Cristal, Pilsner and Atlas.
The combined business will have annual beer volumes of around 175m hectolitres - 38.5bn pints - and pre-tax earnings in the region of US$3.5bn, said SABMiller chief executive Graham Mackay (pictured). Annual cost savings of approximately US$120m are expected by 2010. The deal is the latest and by far the largest in a series of global SABMiller acquisitions in recent months. In February this year the group completed its takeover of Italian beer maker Peroni, while in May it agreed to a stage deal to acquire Slovakian brewer Topvar.
Then in June, SABMiller announced it acquired the residual interest in Indian joint venture partner MBL Investment s and was investing US$125m into its Indian subsidiaries over the next five years.