UPDATE: 5:42 a.m. EST -- After Anheuser-Busch InBev formally offered to buy SAB Miller in a deal that's valued at about $107 billion, the latter's shares were up 2.74 percent in London.

The deal, which was approved by SABMiller's shareholders last month and has to be approved by regulators, will lead to annual savings of $1.4 billion four years after the merger is completed, according to reports. The combined company will brew nearly a third of all the beer produced in the world, and eclipse rivals like Carlsberg, which reportedly announced Wednesday that it will cut 2,000 jobs in a cost-cutting exercise.

"With today's developments, execution is still important but they have a bit of breathing room," Morningstar analyst Philip Gorham told Reuters, referring to the regulatory uncertainty around the deal's completion.

UPDATE: 3:12 a.m. EST -- Anheuser-Busch InBev formally offered to buy SAB Miller for 44 pounds per share, or $107 billion, Bloomberg reported, citing the companies. SABMiller will sell its stake in MillerCoors to its partner, Molson Coors, for $12 billion.

“We believe this combination will generate significant growth opportunities and create enhanced value to the benefit of all stakeholders,” AB InBev CEO Carlos Brito reportedly said, in the statement.

Original story:

Anheuser-Busch InBev, owner of Budweiser, is poised to make its formal offer for SABMiller on Wednesday, with a side deal also reportedly in place for them to give up the Miller brand to the Coors group, heading off concerns the merger will create a too-large beer giant, the Wall Street Journal said.

AB InBev and SABMiller reached an initial agreement last month but have obtained three extensions from regulators as they tried to unload SABMiller's 58 percent stake in MillerCoors, a seven-year venture with Molson Coors Brewing. The buyer, for $12 billion, will be Molson Coors and will be announced Wednesday together with the final $104 billion deal between AB InBev and SABMiller, the Journal said.

MillerCoors makes and sells Miller Light, Blue Moon and Coors Light, and if the deal goes through, Coors gets the right to sell Miller around the world, according to the New York Times. South Africa's SAB has owned Miller since 2002.

AB InBev controls 45 percent of the U.S. beer market and adding MillerCoors' 25 percent could have led the U.S. Justice Department to block the deal, according to the Journal. If the companies don't sign a final agreement Wednesday, they can't come back until next spring, the Times said.

SABMiller and Molson Coors agreed their transaction would only go through if the bigger deal between AB InBev and SABMiller happens, according to reports.

AB InBev and SABMiller are already the two biggest brewers in the world with a combined 28 percent of the global beer market, three times the size of their closest rival Heineken.