Altria Group Inc., the parent company of Marlboro cigarettes, is set to sell a portion of its stake in Anheuser-Busch InBev SA for up to $2.2 billion. The move comes as Altria looks to fund its own share repurchases, with plans to sell AB InBev stock in a global secondary offering of shares in various countries.
The tobacco giant currently owns about 10% of the beermaker and is expected to offer AB InBev US shares in the price range of $60.75 to $62.75 each. Analysts have long speculated about Altria selling its stake in AB InBev, which dates back to the acquisition of SABMiller in 2016.
Altria’s CEO, Billy Gifford, called the sale of a fifth of its stake in AB InBev an opportunistic move to generate a substantial return on investment. This decision follows a similar move by British American Tobacco Plc, which announced plans to sell shares in its Indian partner ITC Ltd. to return cash to shareholders and invest in its business.
The sale of part of its AB InBev stake could indicate Altria’s intention to focus on developing its own non-combustible nicotine products. The company currently offers alternative products such as NJOY vape products and On! oral nicotine pouches.
AB InBev also plans to repurchase $200 million of shares directly from Altria, which could result in short-term volatility in share price. Analysts believe that further buybacks may be on the horizon, given Altria’s balance sheet repair and AB InBev’s growing cashflows. Stay tuned to Bio Prep Watch for more updates on this developing story.
