crystallising gains an option1 Dec 2015 05:35
by Michelle McGagh on Dec 01, 2015 at 05:00
Citywire
SABMiller deal on track but crystallising gains an option
Drinks company AB InBev’s deal to buy rival SABMiller (SAB) is expected to go ahead, with two premium brands set for the chop to satisfy regulators.
Shore Capital analyst Phil Carroll retained his ‘hold’ recommendation but does not have a target price on the stock.
‘We note the article in the Sunday Times, which states that AB InBev may be considering SABMiller’s Peroni and Grolsch premium brands in order to enable the acquisition of SAB to proceed,’ he said.
‘The potential need to sell the brands would probably be more of a minor irritation to AB InBev, in our opinion, than a material issue with the major prize in SAB being more related to its sizeable portfolio of over 200 local brands in key growth markets such as Africa and Latin American and of course the cost of synergies from the business combination.’
He added that while the deal was progressing and expected to complete in the second half of next year, ‘more cautious SAB shareholders may want to consider crystallising the gain so far noting there are still many regulatory hurdles to overcome’.