Announcing what would create a beer behemoth controlling nearly one third of the world’s beer supply, Belgium’s Anheuser-Busch InBev NV and SABMiller plc said the companies have reached agreement in principle on the key terms of a possible takeover by AB InBev.

According to the Associated Press, Ab InBev offered to purchase SABMiller for $106 billion.

AB InBev said in September it was targeting SABMiller for a possible takeover, and nearly one month later, it appears a deal has been reached. But SABMiller did not give in easily, passing on a number of lower valued offers before reaching a tentative agreement. The deal offers SABMiller shareholders $67.59 per share, with a partial share alternative available for approximately 41 percent of the SABMiller shares.

The proposed deal must be approved by regulators and will likely be put under scrutiny of antitrust laws to ensure a takeover does not prohibit fair competition. Should the transaction fail to close, AB InBev agrees to pay SABMiller a $3 billion reverse break fee.

A combined company would have a value of approximately $275 billion and would produce about one-third of the world’s beer supply, according to Reuters. Headquartered in London, SABMiller (the world’s second-largest brewer) traces its roots to the South African gold rush of 1886. It became a leader in southern Africa by building on strategic acquisitions before turning its attention to international markets in the 1990s. In 2002, SAB acquired the Miller Brewing Company and now produces more than 200 beers, including popular brands such as Miller, Peroni, Milwaukee’s Best and Grolsch, in over 80 countries. According to the Associated Press, AB InBev—with products including Budweiser, Corona and Beck’s—seeks expansion into more countries and believes SABMiller can provide it a doorway into the growing African beer market.

Last year, Heineken N.V., the world’s third-largest brewer, rejected an acquisition offer from SABMiller. Heineken said it consulted its majority shareholders and concluded a deal with SABMiller was not in the best interest of the company.

Major brewers like AB InBev and SABMiller are looking for new opportunities to build in markets outside the US and Europe where business has weakened in recent years due to more consumers turning to craft beer. In the US, craft beer continues to outperform the overall beer market and now represents 11 percent of total volume.