Altria headquarters. Image source: Altria.

After a short but intense series of negotiations and offers between the two companies, beer giants Anheuser-Busch InBev (NYSE:BUD) and SABMiller have finally come to an agreement for a $104 billion merger. For shareholders in tobacco blue-chip Altria Group (NYSE:MO), the news has huge ramifications, given the fact that Altria owns about 27% of SABMiller. Yet even as many investors are celebrating the successful conclusion of a merger agreement, those who believe that Altria will end up with a sizable stake in Anheuser-Busch InBev need to keep in mind the many obstacles that could get in the way of a final deal. Let's take a closer look at what the companies agreed to and what roadblocks could lie ahead for the merger.

The history of AB InBev and SABMiller's dealmaking
Thanks in large part to British takeover rules that require a quick process for making formal offers for acquisitions, the series of proposals from Anheuser-Busch InBev occurred in quick succession. An initial bid of 38 British pounds per share for the U.K.-based SABMiller was followed by escalating proposal, culminating in a final deal for 44 British pounds per share. That values the company at about $104 billion and would give most SABMiller shareholders a quick 50% profit.

Yet investors expect Altria to take advantage of an alternate arrangement that gives it less value but includes an ongoing stake in Anheuser-Busch InBev and the tax advantages that would come with it. Under the arrangement, Altria will receive almost 48.4 unlisted Anheuser-Busch shares for every 100 SABMiller shares it owns, plus an additional cash payment of 377.88 British pounds per 100 shares. According to Anheuser-Busch's press release, this alternative represents a smaller premium to SABMiller's share price prior to the merger -- about 33%, compared to 50% for the all-cash offer -- but it allows Altria and other major shareholders the opportunity to avoid triggering capital gains tax.

At this point, the deal is an agreement in principle, with a formal offer remaining to be made. The new deadline for a formal offer is Oct. 28, and Anheuser-Busch can make certain changes to the offer in the interim.

Why the deal isn't done
Even with the components of a potential deal in place, Altria shareholders shouldn't count on an SABMiller/Anheuser-Busch merger getting done. Considerable challenges remain, especially in the antitrust realm, as the two beer makers have large market shares in key markets. For instance, in North America, Anheuser-Busch already controls 45% of the market, according to Euromonitor figures compiled by The Wall Street Journal. SABMiller's stake in the Miller Coors joint venture gives it about 13% of the North American market, and most believe that SABMiller will have to sell off its stake in the venture in order to satisfy regulators. Similarly, the combined entity would control more than 60% of the Latin American market, and SABMiller's venture with China Resources could pose some issues with the emerging market nation's government as well.

Indeed, SABMiller shareholders aren't taking a deal for granted. The stock currently trades fully 10% below the cash offer for shares, and while some discount for a pending deal is normal, the size of that discount is fairly high given the fact that both companies have agreed to general terms.  

For Altria, though, even a failed deal would bring a victory of sorts. Not only would Altria get to keep its concentrated stake in SABMiller, but it would also benefit from a proposed $3 billion breakup fee that Anheuser-Busch InBev has agreed to pay to SABMiller if the acquisition falls through. Altria's comments on the possible merger were relatively simple, saying that the company was pleased that Anheuser-Busch InBev and SABMiller had reached agreement and that it looked forward to working with both parties toward a final deal.

Altria is up only about 10% since speculation about the deal began, suggesting that some investors aren't as excited about the offer terms for the tobacco giant as SABMiller shareholders are about their cash rewards. With plenty of moving parts yet to be resolved, Altria will need to keep a close eye on SABMiller to see what happens in its negotiations with Anheuser-Busch to get a final combination worked out.