A major Anheuser-Busch InBev (or AB InBev) shareholder is planning to sell over $2 billion of its stake in the company.
Tobacco company Altria Group holds about a 10% stake of the brewing company — or 197 million shares — and would sell 18% of the stake in a secondary offering that it would use proceeds from to buy back common stock.
Altria, which makes Marlboro cigarettes, said Wednesday (Mar. 14) it planned to sell 35 million shares in a global secondary offering, which would amount to about $2.26 billion at AB InBev’s current stock price of $64.55. The brewing company also agreed to buy back $200 million worth of ordinary shares from Altria if its offering is completed. “We believe this is an opportunistic transaction that realizes a portion of the substantial return on our long-term investment,” Altria chief executive Billy Gifford told the Wall Street Journal.
According to the tobacco company, its global secondary offering would include selling American depositary shares of the brewing company, a public offering of its ordinary shares in the U.S., a private placement of shares in the U.K. and Europe, and ordinary shares in countries outside the U.S. Neither AB InBev nor Altria immediately responded to a request for comment.
Beleaguered by Bud Light
AB InBev has had a rough year. Following boycotts of Bud Light after a controversial campaign with transgender activist Dylan Mulvaney (and a bungled communications by the brand), the product lost its place as the U.S.’s best-selling beer to a competitor — Mexican beer Modelo Especial.
Despite the backlash, AB InBev reported better-than-expected earnings last May, with a core profit of $4.76 billion. But chief executive Michel Doukeris warned investors on the earnings call it was “too early to have a full view” of the boycott’s impact on the company’s sales at that point.
In August, AB InBev announced it had beat quarterly earnings expectations again, despite the fallout, and beat fourth-quarter earnings expectations again in February.
But its controversies may have opened up opportunities for competitors beyond Modelo, too. In February, beer producer Molson Coors suggested its own record revenue was partly driven by a Bud Light backlash.
“Our data shows that the majority of consumers who switched to our brands post-April have stayed with us throughout 2023, and then much more loyal to our brands than historically,” Moors Colson chief executive Gavin Hattersley said on the call, referencing the controversy. “The reality is there’s no reason to believe that these buyers are suddenly going to revert.”