Marlboro cigarettes owner Altria Group Inc (NYSE:MO, ETR:PHM7) has unveiled plans to sell a US$2.2 billion stake in Budweiser brewer Anheuser-Busch InBev (NYSE:BUD).
Dubbing the transaction “opportunistic”, Altria said 35 million shares in the brewing giant would be sold to fund its own future buybacks.
Prior to the sale, Altria held 197 million shares equating to a 10% ownership stake in AB InBev.
“We believe this is an opportunistic transaction that realises a portion of the substantial return on our long-term investment,” Altria chief executive Billy Gifford commented.
Altria’s sale of the stake comes after AB InBev overcame a social media-fuelled boycott of its Bud Light brand in the US last year to post 7% higher core profits of US$20 billion.
The boycott had come on the back of Bud Light’s partnership with transgender influencer Dylan Mulvaney, which prompted outcry by far-right personalities online.
AB InBev will directly repurchase US$200 million worth of the shares from Altria through the deal, with underwriters expected to be granted options on 5.25 million shares.
“Over the decades of our ownership, the beer investment has provided significant income and cash returns and supported our strong balance sheet, Gifford added.
“Our continued investment reflects ongoing confidence in AB InBev’s long-term strategies, premium global brands and experienced management team.”
Shares in the brewer dipped 4% in pre-market trading, while Altria climbed 0.3%.