Budweiser and Miller Lite
Rumours about a tie-up between SABMiller and AB InBev have been going around for yearsGetty

Beer brewer Anheuser-Busch InBev has hiked its bid for rival SABMiller, putting forward an official offer of £42.15 per share, up from initial offers of £38 and £40 per share. Shortly after SABMiller rejected an informal offer from the Belgian brewer, AB InBev made an official bid of £68.2bn for the Grolsch and Peroni owner. SABMiller's share price jumped more than 3% on the initial rejection and has fallen slightly since.

"We have the highest respect for SABMiller, its employees and its leadership, and believe that a combination of our two great companies would build the first truly global beer company," AB InBev chief Carlos Brito said in a statement. "Both companies have deep roots in some of the most historic beer cultures around the world and share a strong passion for brewing as well as a deep seated tradition of quality."

Before the offer, SABMiller's biggest shareholder Altria urged the company to engage "promptly and constructively with AB InBev to agree on the terms of a recommended offer". Altria commented later that it supports the revised offer, saying that it believes a combination of the companies would create significant value for SABMiller investors.

For years, it has been rumoured that the companies are planning a major tie-up which would create a brewer giant to trump competition. Competitors like Heineken in the past have taken steps to merge with other companies to prepare for the SABMiller AB InBev deal.

The merged firm would produce more than a third of all beer in the world and the companies are set to face a series of regulatory hurdles because of the huge competitive advantage it would have.

UPDATE 2.30PM:

SABMiller has rejected the new offer made by AB InBev, minimising the chanses of a megabrew merger. The company's board said it has "unanimously rejected the ... proposal as it still very substantially undervalues SABMiller, its unique and unmatched footprint, and its standalone prospects."