The deal is partly motivated by both companies' need to defend their market share
in mature markets as younger consumers abandon big brands and move towards craft beers; but perhaps more importantly, it offers AB InBev access to the beer industry's last great growth frontier -- Africa.
Research by Deutsche Bank forecasts that 40% of profit growth in the brewing industry over the next decade will come from Sub-Saharan African markets, but InBev, which owns brands including Budweiser, Corona and Stella Artois, has yet to establish a foothold in the region. By contrast, SABMiller has around 40 brands in Africa, and makes around a third of its profit and revenue across 37 African markets.
"I'd say it's the main motivation," says Jonny Forsyth, global drinks analyst at market research company Mintel. "If you are looking for growth, Africa has the most potential, albeit from a low base... There's a huge opportunity to trade people up into the consuming classes."
Brewing has been a bellwether for Africa's consumer goods story. Sustained economic growth across much of the continent has driven a rise in incomes and created a new, higher-earning and consuming middle class, which has in turn led to a boom for makers and retailers of consumer goods.
In 2012 the African Development Bank said that there were 300 million people -- around 30% of the total population of the continent -- in a consuming class that spends between $2 and $20 per day. Although this is small by European or North American standards, it is still growing, creating a compelling market for consumer goods manufacturers and retailers willing to make long-term investments.
SABMiller, along with fellow drinks companies Heineken and Diageo, have been some of the most vocal cheerleaders for Africa's growth story.
"The beer companies are really the frontrunners in frontier market investment," says Anna Rosenberg, Sub-Saharan Africa practice leader at consultancy Frontier Strategy Group. "They are at the heart of what makes African markets attractive -- low value products at high volumes."
Localisation has been an important part of the brewers' strategy, Rosenberg says. Rather than relying on imported drinks, they have created or expanded local brands -- such as Kenya's iconic Tusker beer, brewed by Diageo subsidiary East Africa Breweries, and SABMiller's White Bull, which became a symbol of independence in South Sudan.
SABMiller and Diageo have both created beers using cassava and sorghum -- widely-grown local crops -- instead of imported barley, reducing their costs and allowing them to buy from local farmers. This, in turn, helped them to lower the price of their brands and compete with cheap, low-quality home brews.
These lower income consumers have become an important battleground, and competition between the brewers has begun to intensify, particularly in larger markets.
Nigeria, with a $520 billion economy and a population of 180 million people, 70% of whom are under 30, is the most important growth market in Africa for consumer goods companies. Heineken's dominant market share in the country has gradually been eroded by SABMiller's strategy of targeting rural areas with low-cost, local brews, according to Lanre Akinlagun, owner of Drinks.ng, a Lagos-based distributor.
Akinlagun says that premium beers are losing out at the top end of the market to a growing culture of spirits and wine in urban areas, and at the bottom to newer, cheaper beers. Last year Heineken merged its two Nigerian subsidiaries -- Nigerian Breweries Ltd, which produces market leader Star Lager, and Consolidated Breweries Ltd -- last year to try to reduce costs and become more competitive.
SABMiller's approach of targeting rural, low-income consumers allowed them to steal a march on their rivals, and forced them to shift strategy, according to Akinlagun.
"[SABMiller] basically tackled these guys from the outside," he says, "and it's working."