The London-listed SABMiller has agreed to sell itself to Belgium-based brewer Anheuser-Busch InBev for $104bn (£68bn).
While AB InBev is the world's biggest brewer, SABMiller is its competitor.
The boards of the two companies said they had reached agreement "in principle" on the core terms of a "possible recommended offer", reported the Guardian.
Over the last one month, SABMiller has repeatedly rejected takeover offers of AB InBev.
AB InBev has proposed to pay £44 a share in cash as well as offered a partial share alternative option for 41% of the stake owned by two largest shareholders of SABMiller's - Altria and BevCo.
AB InBev had time until 5pm on 14 October to make an official bid. SABMiller had in total rejected AB InBev's five proposals, which also included a price of £43.50-a-share offered on Monday.
This deal would mean that the merged entity would produce one out of every three beers globally and would be one of the sixth largest acquisitions in history and the biggest deal in a year that had seen several mergers and acquisitions across several industries.
The merged entity would have annual sales of $73.3bn, making it three times more than competitor Heineken, reported The Associated Press.
As profits dip in Americas, AB InBev intends to push into Africa, which is considered to be the emerging beer market and SABMiller has significant hold here.
This move comes as multinational brewers are facing tough competition from craft beer makers, which is popular with millennial and younger population.
The deal is, however, likely to draw objection from regulators as the size of the two companies may stifle competition in several markets.
