AB InBev plays down talk of move beyond beer

Wed Apr 27, 2016 10:15am EDT
 
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By Philip Blenkinsop

BRUSSELS (Reuters) - Anheuser-Busch InBev (ABI.BR: Quote), the world's largest brewer which is set to buy nearest rival SABMiller SAB.L, believes future acquisitions are more likely to be in beer rather than branching out into other beverages, its chief executive said on Wednesday.

Analysts and investors are already speculating on AB InBev's next potential target -- with possibilities ranging from spirits company Diageo (DGE.L: Quote), unlisted French wine and beer group Castel, which has a large African presence, and Coca-Cola (KO.N: Quote).

"We've always done it within beer. We don't believe in going too much outside beer. That makes the likelihood of success in integration higher," CEO Carlos Brito told the company's annual meeting.

The comments from Brito suggested that future deals were possible but that candidates were more likely to be drawn from closer to its core business.

AB InBev, which makes Budweiser, Stella Artois and Corona, expects to seal its $100 billion-plus acquisition of SABMiller in the second half of the year.

Speculation about AB InBev's next move has been strengthened by a six million share option plan for some 65 senior managers, below the executive board, which would be granted if the company's revenue hit $100 billion in 2020, 2021 or 2022.

AB InBev's revenue last year was $43.6 billion. With SABMiller, that would be a pro-forma of $55-60 billion, including disposals, leaving a 70-80 percent hike required in a maximum of seven years.

Without further acquisitions, this would be a giant leap, particularly with currency weakness versus the dollar making any expansion this year hard to achieve.   Continued...

 
Carlos Brito, chief executive of Anheuser-Busch InBev poses with a Stella Artois beer after the annual shareholders meeting in Brussels, Belgium, April 27, 2016. REUTERS/Francois Lenoir