AB InBev announces $1bn share buyback

Anheuser-Busch InBev announced a $1bn share buyback on Tuesday, a move likely to cheer investors who want to see the world’s largest brewer returning more cash after years of focus on paying down debt from blockbuster acquisitions.

AB InBev also said it would offer $3bn in cash for bonds as it continues to cut down its debt pile. It reported better-than-expected third quarter revenue even as consumers bought less of its beer.

The Belgian maker of brands such as Stella Artois, Corona and Budweiser built itself into the world's top beer maker via a series of huge buyouts that saw several major brewers internationally merged into one global giant.

However, following the acquisition of Africa's SABMiller in 2016, it struggled to pay down a more than $100bn debt pile.

It has since shifted its strategy to focus on organic growth and brought debts down significantly, but they remain a key watch for investors who also want to see more funds returned to them.

“We continue to focus on deleveraging and have approved a cash tender offer for up to $3bn in aggregate purchase price of outstanding bonds,” AB InBev said in its third quarter results statement, adding its board had also approved the share buyback to be executed over the next 12 months.

Like rival brewer Heineken, AB InBev’s beer volumes fell in the third quarter, with the brewer citing a decline in beer sold in the US and a “soft” environment in Europe.

AB Inbev6s Bud Light has lost its top spot among US consumers recently after a conservatives backlash over a social media promotional campaign with Dylan Mulvaney, a transgender influencer.

But the company's overall revenue grew 5% in the quarter to $15.57bn, versus the 4.7% expected on average by analysts, according to a company compiled consensus, thanks to higher prices and consumers opting for more expensive brews.

Reuters