Marlboro maker Altria sells $2B stake in AB InBev

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Dive Brief:

• AB InBev’s stock dropped more than 5% Thursday after tobacco giant Altria sold nearly a fifth of its 197 million shares in the alcohol giant. The stake is worth an estimated $2.2 billion. The cigarette producer, which has held stock in the brewer since 2016, offloaded roughly 10% of its shares.
• The Bud Light and Michelob Ultra brewer separately announced plans to buy back roughly $200 million of the shares, according to an SEC form filed by the company Wednesday.
• The move is the latest financial headache the alcohol manufacturer faces as it works to overcome a multi-year decline in beer sales and rebound from turmoil tied to a marketing campaign with a transgender influencer that led to a loss in market share for Bud Light.

Dive Insight:

Altria, a leading maker of cigarettes and other tobacco products in the U.S., said in a statement that its sale of the AB InBev stocks is intended to drive value to its own shareholders.

While the brewer’s stock fell on the news, at least one analyst on Wall Street believes it could be a positive for the company in the long run. In a note to investors Wednesday, TD Cowen analyst Robert Moskow predicted AB InBev’s stock buybacks could improve its performance in its 2025 fiscal year.

“While the news of Altria’s sale will weigh on the stock’s price in the near-term, we view [AB InBev’s] $200M share repurchase as a positive signal regarding its intention to buy back more shares in the future,” Moskow said.

Last month, AB InBev’s Anheuser-Busch narrowly avoided a strike at its U.S. production plants by reaching a tentative agreement with the International Brotherhood of Teamsters union, which included wage increases and greater vacation time for employees.