LONDON (Reuters) – Anheuser-Busch InBev shares were suspended from trading on Thursday at the request of Belgium's Financial Services and Markets Authority (FSMA), following reports that tobacco giant Altria would sell its shares.
The U.S. tobacco maker said Wednesday it would cut its stake in the world's top beer maker by about 10%, selling about 35 million shares, or about a fifth of its total holdings. AB InBev plans to buy back shares worth $200 million.
AB InBev said in an accompanying statement on Wednesday that FSMA had requested a trading halt on Thursday pending the publication of a press release on expected pricing later in the day.
AB InBev CEO Michel Doukeris added: “We remain disciplined in our capital allocation decisions and participation in this business is consistent with our strategy.”
James Edwardes-Jones, an analyst at RBC Capital Markets, said it's not surprising that Altria would sell its stake in AB InBev.
“Overall, we feel this is likely to act as a short-term brake on ABI's stock price, but the long-term significance is minimal,” he said in a note. .
When AB InBev acquired the African beer maker in 2016, Altria received cash and AB InBev stock in exchange for its ownership of SABMiller. Around that time, the tobacco company also added a stake in the integrated beer company.
In 2016, AB InBev's trading price consistently exceeded $120 per share, sometimes reaching $130 per share. Since then, the stock has fallen steadily and was trading at just over $64 per share on Wednesday.
Bernstein analyst Callum Elliott said Altria has moved away from viewing stocks as “strategic” to viewing them as “financial investments” as income from stocks has declined.
Tobacco companies hope to use the proceeds from the sale to fund additional stock buybacks.
(Reporting by Emma Rumney; Editing by Jason Neely and Elaine Hardcastle)
