Monolith: Copper brewing vats stand inside the Beck’s Brewery, operated by AB InBev, in Bremen, Germany. Picture: Bloomberg/Jasper Juinen
Monolith: Copper brewing vats stand inside the Beck’s Brewery, operated by AB InBev, in Bremen, Germany. Picture: Bloomberg/Jasper Juinen

It was AB InBev’s skills as a banker rather than as a brewer that ensured what was a comparatively small Brazilian beer company in the early 1990s would win the global beer industry’s 25-year consolidation battle.

It became the undisputed winner of that tussle in 2016 when it acquired SABMiller in an unprecedented $107bn transaction, effortlessly funded by investors who’d been charmed by the Brazilians’ proven talent — not in brewing beer but in the much more important area of capital allocation.

No doubt it helped that AB InBev’s debt-fuelled acquisition trail generated huge fees for many of the same investors. For years the prospect of yet another mega-deal kept the share price high and secured the support of funders.

But after swallowing SABMiller, the group’s debt profile, which extends out to 2046, was evidence that AB InBev executives had little intention of doing another major deal. This may have clashed with the wishful thinking that drives a market addicted to doing deals, whatever the cost.

During 2018 AB InBev was one of the worst performers on the Euro Stoxx 50 index of European blue chips, falling 38% on the year.

In this context the group’s noncommittal response to speculation of a listing for its Asian business is significant. It is always looking at opportunities to optimise its business and drive long-term growth, said a spokesperson.

It was a response designed to encourage speculation and test the market’s desire to have some sort of transaction on the horizon.

Razeen Dinath, head of equity research at Cadiz, welcomes the prospect of an Asian listing because the estimated $5bn proceeds would help reduce debt levels and result in less risk.

But Ina Verstl, co-author of a fascinating account of the consolidation of the industry, describes the Asian speculation as a sign that a battle of wills is raging between AB InBev and the "money men".

"The money men have finally realised AB InBev has no intention of clinching any more major deals. Taking over Coke, Castel, etc are merely investors’ pipe dreams."

Verstl says this is evident from the debt maturity profile, which has been stretched out even further by the latest refinancing plan. She believes, despite the recent dividend cut, that the two core shareholders (Jorge Paulo Lemann and the Belgians) are intent on getting their money out through dividends and putting it into ventures of their own.