Will Brexit Tank SABMiller-AB InBev Merger?

All convergence planning has been "paused," SABMiller CEO Alan Clark said in a memo to employees.

LONDON (AP) — SABMiller has suspended work on integrating its operations with those of Anheuser-Busch InBev while it reviews AB InBev's sweetened bid, raising concern about completion of the 79 billion pound ($104 billion) takeover.

The suspension, announced by SABMiller CEO Alan Clark in a memo to employees on Tuesday, came soon after AB InBev increased its cash offer to 45 pounds per share. The higher price was meant to blunt a revolt by investors who had seen the relative value of their payout plummet as the pound declined following Britain's vote to leave the European Union.

All convergence planning has been "paused" and there should be no contact with representatives of AB InBev, the maker of Budweiser, as SABMiller's board considers the offer, Clark said in the memo.

"I appreciate this will cause lots of internal and external speculation," Clark wrote. "However, please stay focused, and I will updated you as soon as I am able to."

One analyst said it was possible that SABMiller was simply moving cautiously.

"We do not consider it a sign SAB is considering changing its recommendation of the transaction," St. Louis-based investment firm Stifel said in a statement. "Rather, we believe it is a symptom of fiduciary duty."

The pause comes after SABMiller acknowledged that it had been surprised by what AB InBev said was its "final" offer. Under U.K. takeover rules, a final offer can't be increased.

"The board needs to consider the revised offer, taking into account all facts and circumstances," Clark wrote.

SABMiller's board in November accepted, in principle, a deal that would combine the world's two largest brewers into a company controlling nearly a third of the global beer market.

But AB InBev shares, which are denominated in euros, have risen 3.2 percent since then and the pound plunged against the European currency after the referendum on Britain's exit from the EU. That reduced the value of the cash offer compared with a cash-and-stock option tailored for U.S. tobacco company Altria and BevCo, an investment vehicle of the Santo Domingo family, which together own about 40 percent of SABMiller and wanted to remain shareholders of the new company.

Aberdeen Asset Management, whose stake in SABMiller is in excess of one percent, on Tuesday made plain its unhappiness with both the new cash offer and the overall situation. It argues the offer undervalues SABMiller and favors the company's two biggest shareholders.

"The revised deal remains unacceptable," it said in a statement.