Shares in SABMiller, the world's second biggest brewer, fell almost 4% on May 15, hit by a steep fall in the South African rand and nagging fears about the price it is paying for Peroni, according to Reuters. By 1030 GMT the stock was the biggest FTSE faller, down 3.7 percent at 426-1/2 pence.

"They get a lot of their earnings in South Africa, but they report in dollars," said one dealer. Credit Suisse First Boston repeated its "underperform" rating on the stock citing rand weakness risk. The dealer added that concerns that SABMiller is paying too high a price for family-owned Italian beer firm Peroni continued to weigh on the stock. "That still remains a factor," he said.
On May 14 SAB said it had agreed to buy a majority stake in Peroni for 246 million euros ($282.2 million). One analyst said the deal came with limited costs savings. But one analyst who declined to be named, said the move was a kneejerk reaction. "We expect confidence to be reinstated when they report results next week," the analyst said. SABMiller is scheduled to report full-year figures on May 22.

After succeeding in taking control over Peroni, the Italian brewer, SABMiller plans to launch the brands Peroni and Azzurro in the US.

16 May, 2003