New York - Philip Morris, parent of the world's largest tobacco company and Miller Brewing, said on Wednesday there was no certainty a deal would come from its talks with SAB about Miller.
Philip Morris chief financial officer Louis Camilleri, who will step into the chief executive role next week, also said the company would explore any deals that were favourable for its shareholders and for Miller.
"We are not oblivious to what's going on in the whole brewing industry," Camilleri said, when asked about Miller during a conference call with analysts.
In the past two years Whitbread, Bass and Kronenbourg have all changed hands as Europe's Big Five - Interbrew, Heineken, Carlsberg, Scottish & Newcastle and SAB - have looked towards consolidating a traditionally fragmented market.
Meanwhile, alternative malt beverages, or malternatives, are chipping away at mainstay premium beers in the US market.
Philip Morris confirmed in early April that it was in talks with SAB about a potential deal involving Miller, the second-biggest US brewer behind Anheuser-Busch. Neither company put a price on any possible agreement, but reports have said it could be worth $5 billion.
Miller has been losing share to other players. But the Milwaukee-based company has raised prices, introduced new advertisements and is rolling out flashy, flavoured malt beverages in a bid to secure its place in the market.
Camilleri said on Wednesday that Philip Morris thought the turnaround at Miller was "on plan".
The firm was not under immediate pressure to shed Miller, bankers said, but the unit was not a long-term growth business for the tobacco giant.
Philip Morris needed to make a change to its Miller strategy, these people said, because it does not have a niche and has lost market share in the wake of Anheuser-Busch's continued growth.
Philip Morris reported its first-quarter results earlier on Wednesday. Underlying operating income for Miller, whose brands include Miller Lite and Miller Genuine Draft, increased 4.8 percent, following a 30.5 percent jump in the fourth quarter.
Domestic shipment volume also climbed in both quarters. In the first quarter, volume growth was driven partly by the recently launched Skyy Blue malt beverage from Miller and Skyy Spirits.
A deal would give SAB, the world's fifth-largest brewer with brands such as Castle and Pilsner Urquell, the opportunity to expand away from developing areas.
But some have questioned whether it would have any more success than Philip Morris in taking on Anheuser-Busch in its home market.
SAB's shares closed down 1.24 percent at R87.40 on the JSE Securities Exchange yesterday after peaking at a new high of R90 earlier in the day. In London, the shares closed fractionally higher at P5.50.
Shares of Philip Morris, whose Kraft Foods is the world's second-largest food company behind Nestle, were down 43c at $52.93 on the New York Stock Exchange.