Bottles of Castle Lite beer sit on the production line after labeling at the company's Alrode depot in Johannesburg, South Africa, on Thursday, Oct. 14, 2010. SABMiller Plc , the world's second-biggest brewer, has made no approach to buy Groupe Castel's African beer business, according to the unit's chief financial officer. Photographer: Nadine Hutton/Bloomberg Bottles of Castle Lite beer sit on the production line after labeling at the company's Alrode depot in Johannesburg, South Africa, on Thursday, Oct. 14, 2010. SABMiller Plc , the world's second-biggest brewer, has made no approach to buy Groupe Castel's African beer business, according to the unit's chief financial officer. Photographer: Nadine Hutton/Bloomberg
London - SABMiller shares climbed as much as 4.1 percent on renewed speculation that the beer company could be a takeover target of larger rival Anheuser-Busch InBev NV, the maker of Budweiser.
Investors seized on the fact that ABI’s chief financial officer didn’t appear at a conference last week, said Morningstar analyst Adam Fleck, citing an investor blog. Altria Group, the biggest shareholder in SAB, also is skipping an upcoming event. That company is seen as pivotal to any possible merger between the brewers.
ABI had an investor-relations representative give a presentation at the Barclays Back-to-School Consumer Conference on September 10 in Boston, rather than CFO Felipe Dutra. Cigarette maker Altria, meanwhile, is missing a Bank of America Merrill Lynch conference later this week. The company has a conflict, said spokesman Bill Phelps. Altria, based in Richmond, Virginia, owns about 27 percent of SAB.
There have been “on-again, off-again rumours” of a deal between ABI and SAB, whose brands include Grolsch and Miller Lite, Fleck said. “Pulling out of these conferences may be due to some deal getting done.”
Representatives for SAB and ABI declined to comment.
Heineken misfire
SAB’s separate attempt to acquire Heineken NV was rebuffed a year ago, a move that would have strengthened defences against a potential bid by ABI, according to people with knowledge of the matter. ABI Chief Executive Officer Carlos Brito has said he’s willing to make acquisitions if the circumstances are right, and slowing growth in emerging markets has made it harder for brewers to fuel sales with organic expansion alone.
SAB ended the London trading day up 2.8 percent to 3,014.5 pence, while ABI rose 0.3 percent to 94.45 euros in Brussels. Altria was up 3.2 percent at the close of trading in New York.
Molson Coors Brewing Company, which owns a minority stake in the SAB joint venture MillerCoors, also would benefit from such a deal, Fleck said. If there’s a merger between SAB and ABI, Molson Coors would probably inherit the entirety of MillerCoors, helping the transaction pass antitrust scrutiny. Molson Coors rose 5.1 percent to $72.64 on Tuesday, marking the biggest gain in a year.
“There are a lot of synergies that could happen from ABI buying SAB,” Fleck said. “There’s a lot of good geographic synergy.”
BLOOMBERG