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$275bn drinks mega merger talk lifts markets

SAB MillerWed: A huge mega-merger of two of the world’s biggest breweries whetted investors’ appetites today as Anheuser-Busch InBev sent shares in SAB Miller higher after confirming it had approached the company about a $275bn tie-up.

Shares in SAB Miller, which owns such brands as Peroni and Grolsch, were up 20.8%, while AB InBev, with the Budweiser, Stella Artois and Corona brands, rose 8.4%.

The deal would see the combined company selling one in every three of the world’s beers and produce savings of $2.3bn. It would bring together InBev’s dominance of Latin America with SABMiller’s strong presence in Africa. The likelihood of a competition inquiry is very high.

News of the approach helped lift otherwise subdued markets waiting on the Federal Reserve’s decision on interest rates tomorrow.

Stocks in London were helped higher after the latest jobs report came in better-than-expected and the Bank of England governor remained vague on interest rates in a written testimony.

The Office for National Statistics said average weekly earnings rose 2.9% in the three months to July, compared to the consensus forecast for a 2.5% increase and the previous quarter’s 2.6% gain. It marked the fastest rate of growth in more than six years.

The report also showed employers added 42,000 jobs in the May-July period, smashing estimates for a 18,000 rise and marking an improvement on the prior 63,000 dip. The jobless rate unexpectedly fell to 5.5% from 5.6%.

Aberdeen Asset Management shares were up after Tuesday’s announcement that  the company had bought London-based specialist investment manager Advance Emerging Capital for an undisclosed sum.

The FTSE 100 rose 1.49% to 6,229.21.

 

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