SABMiller share price under pressure as hope for 3G Capital move wanes
Shares in South African brewer SABMiller Plc (LON:SAB) have come under pressure today following the news of a near $40-billion deal by investor Warren Buffett and Brazilian private equity company 3G Capital, the owners of HJ Heinz, to buy Kraft Foods. The mammoth deal, which will see the merger of Kraft with HJ Heinz into the world’s fifth largest food and beverage company, reduces the possibility of 3G making a move on SABMiller. Mike van Dulken, head of Research at Accendo Markets, observed:
“[The Kraft] talks likely imply a previously mooted £75bn bid for SABMiller being off the table, in the near-term at least, from competitor Anheuser-Busch InBev and partner 3G (which controls a 21% Budweiser stake since the 2008 Belgian-US merger), flattening some of the sector M&A fizz which had been bubbling for a while even if SAB’s prospects remain strong thanks to an enviable emerging markets growth story.”
SABMiller’s share price saw significant losses earlier in today’s trading session, tumbling as much as 1.9 percent. The brewer managed to pare some of the losses in the afternoon. In today’s trading, SABMiller shares were down 0.6 percent at 3,643.75p, as of 15:25 UTC. The stock has advanced 8.4 percent since the start of the year. The company’s market capitalisation currently stands at just over £59 billion.
As of March 24, 2015, the consensus forecast amongst 35 polled investment analysts covering SABMiller Plc has it that investors should hold their position in the company. This consensus estimate has been maintained since April 18, 2014, when the sentiment of investment analysts deteriorated from “hold”.
As of 16:50 GMT, Wednesday, 25 March, SABMiller plc share price is 3,652.75p.