E-Malt.com News article: Brazil: AmBev shares jump on InBev bid for Anheuser

Shares in Brazilian brewer AmBev rallied after its parent company InBev made an unsolicited $46.3 billion bid for U.S. rival Anheuser-Busch, Reuters reported June 12.

In early trading, AmBev shares were weighed down by doubts about how Belgium-based InBev would raise money to finance the deal, with prices hovering near the break-even mark, But the shares took off after InBev said any new debt would likely be based in the United States for tax reasons.

Before noon, the shares were up 8.68 percent at 115.42 reais in Sao Paulo, outpacing a 1.7 percent gain by the benchmark Bovespa index .BVSP. At their peak, the shares rose almost 13 percent.

"There were concerns that AmBev might be used to help finance the deal. That would dilute the value of the shares," said Ricardo Fernandez, a beverage analyst at Itau Corretora in Sao Paulo.

Credit Suisse expressed similar concerns in a research note sent to clients before the market opened, citing uncertainties about the impact of the deal on AmBev's minority shareholders. As a result, it cut its rating on AmBev to Neutral from Outperfom.

AmBev declined to comment.

InBev was formed in 2004 by the merger of Belgium's Interbrew and AmBev, which has long dominated Brazil's beer market. Today, many of InBev's top executives are Brazilians who came from AmBev, including its chief executive, Carlos Brito.

Besides Brazil's top three beer brands -- Skol, Brahma and Antarctica -- AmBev also owns Canadian brewer Labatt, Quinsa in Argentina and has plants in several other Latin American countries. AmBev's main rivals in Brazil are Schincariol and Cervejaria Petropolis, both privatley owned, and Mexico's FEMSA (FMSAUBD.MX: Quote, Profile, Research, Stock Buzz). AmBev finished May with 67.5 percent of Brazil's beer market.


13 June, 2008