(Bloomberg) — Altria Group Inc. is looking for to promote a portion of its stake in Anheuser-Busch InBev SA for as a lot as $2.2 billion to assist fund its personal share repurchases.
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Altria, which sells Marlboro cigarettes within the US, owns about 10% the beermaker. It should promote AB InBev inventory in a secondary providing of American depositary shares, a public providing within the US, and a concurrent non-public placement in Europe and the UK, Altria stated Wednesday in an announcement.
Altria will provide the AB InBev US shares in a spread of $60.75 to $62.75 every, in line with folks accustomed to the plans who requested to not be recognized as a result of the small print haven’t been made public. The shares closed at $64.55 on Wednesday.
AB InBev fell as a lot as 5.1% in prolonged New York buying and selling. Altria was little modified.
AB InBev has additionally agreed to repurchase $200 million of shares straight from Altria when the providing is accomplished. Altria stated it at present holds about 197 million AB InBev shares.
Analysts had for years speculated that Altria may promote the stake in AB InBev, which dates again to when Anheuser-Busch acquired SABMiller in 2016.
The truth that it’s promoting among the stake now, as competitors heats up in cigarette options, suggests Altria may use among the proceeds to develop its personal merchandise, stated Bloomberg Intelligence analyst Kenneth Shea stated.
“That’s an terrible lot of cash for share buybacks,” Shea stated. “Studying between the traces, they want that money to assist them speed up their diversification efforts into non-combustible merchandise.”
These merchandise embody its NJOY vape merchandise and On! oral nicotine pouches.
–With help from Tiffany Kary.
(Provides analyst feedback in seventh and eighth paragraphs.)
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