Bud.US (BUD.US) spent $3 billion to buy back shares in a US metal can factory

The Zhitong Finance App learned that Budweiser InBev (BUD.US) announced that it will buy back 49.9% of its shares in the US metal can factory from a consortium of institutional investors led by Apollo Global Management (APO.US) and providing consulting services at a price of about 3 billion US dollars.

Budweiser InBev said in a statement that the above metal can factory business covers 7 production facilities distributed in 6 US states and is a key strategic component of the company's US supply chain system. Budweiser InBev, which owns brands such as Times Beer and Budweiser, will use its own cash to complete the acquisition.

According to information, the world's largest beer brewer sold part of its shares to Apollo at a price of 3 billion US dollars in 2020 to repay the huge debt it has accumulated due to the acquisition of rival Miller in South Africa in 2016.

Currently, brewers are facing challenges in all markets due to consumer spending control and tariff policies taking effect. Last year, US President Trump imposed high tariffs on steel and aluminum, saying the move was aimed at securing the future development of the US steel industry.

Budweiser InBev emphasized on Tuesday that by regaining full control of its factories, the company will be able to guarantee “the quality, cost efficiency, speed of innovation and supply stability of its brand products, while creating industry-leading manufacturing jobs in communities across the United States and driving local economic growth.”

Senior industry analyst Duncan Fox said, “This move by AB InBev is likely to reinforce the quality of its key packaging assets in the US in response to aluminum tariffs.”

Bernstein analyst Trevor Stirling believes that this deal is more similar to a “debt repurchase” operation. He added that it also “demonstrated the company's confidence in its basic cash flow and deleveraging ability.”

According to reports, although beer sales in the third quarter of last year fell short of expectations and faced serious challenges, AB InBev launched a stock repurchase plan of 6 billion US dollars.

The metal can factory equity transaction is expected to be completed in the first quarter of this year.