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Budweiser maker, Anheuser-Busch InBev, has agreed the terms of its $107 billion takeover of rival SABMiller, in a deal that will combine the world’s two largest beer makers.

AB InBev will pay £44 ($70) for each share in SABMiller, the price it offered on October 13.

To clear the way for the takeover, SABMiller is to sell its 58% stake in its US joint venture MillerCoors.

SABMiller is selling the stake to its main partner in the business, Molson Coors, for $12 billion.AB InBev and SABMiller Agree $107 Billion Merger Terms

The newly-created company will produce about 30% of the world’s beer.

AB InBev’s brands include Stella Artois and Corona, while SABMiller produces Peroni and Grolsch.

“Our combination with SABMiller is about creating the first truly global beer company and bringing more choices to beer drinkers in markets outside of the US,” said AB InBev CEO Carlos Brito.

SABMiller has a workforce of close to 70,000 people in more than 80 countries, and global annual sales of more than $26 billion.

AB InBev has a workforce of 155,000 and global revenues of more than $47 billion.

The two companies are predicting cost savings of at least $1.4 billion a year.

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Beer giant Anheuser-Busch InBev has announced it had made a takeover move for SABMiller.

The combined value of the world’s two largest brewers is likely to be at least $230 billio based on September 15 share price.

AB InBev’s brands include Budweiser, Stella Artois and Corona, while SABMiller owns Peroni and Grolsch.

If the deal is successful, the merged company would produce one third of the world’s beer.AB InBev Makes Takeover Approach for SABMiller

AB InBev said it had approached SABMiller’s board about a “combination of the two companies”.

However, the company added that there was no certainty the approach would lead to an offer or an agreement.

Earlier, SABMiller said it had been informed that AB InBev was planning to make a bid, but that it had no details as yet.

“No proposal has yet been received and the board of SABMiller has no further details about the terms of any such proposal,” the company said.

Shares in SABMiller jumped 20% on the news to close at 3,614p, while AB InBev’s shares were 6% higher in New York.

Given the size of the deal both parties would be likely to have to sell off parts of their operations to get it past the regulators, and that may mean sacrificing some of their US and Chinese businesses .

The merged company would be likely to move aggressively into faster growing markets.

AB InBev has an eye on the African markets where SAB Miller dominates in 15 countries, and has a presence in a further 21.

A merger would also strengthen its grip on South America and Mexico which are by far its most profitable markets.

This deal has long been anticipated but analysts believe AB InBev was held back from making an offer because of high levels of debt built up through a string of other purchases.

SABMiller has also been trying to do deals. Last year it made an unsuccessful offer for its smaller rival Heineken in a move that was widely seen as an attempt to ward off a bid from AB InBev.

Beer companies global market share:

Anheuser-Busch InBev – 20.8%

SABMiller – 9.7%

Heineken – 9.1%

Carlsberg – 6.1%

China Resources Enterprise – 6%

Source: Euromonitor, based on 2014 figures