Peroni and Grolsch maker SABMiller has toasted a strong summer for beer sales despite a “material” currency hit ahead of a potential blockbuster deal with the owner of Budweiser and Stella Artois to create a drinks giant worth more than £180 billion.
SABMiller, which last month revealed an approach by rival Anheuser-Busch InBev in what would mark the biggest ever takeover of a British company, said surging demand in emerging markets such as Africa and Latin America helped underlying net revenues lift 6 per cent and sales by volume rise by 2 per cent over the three months to the end of September.
Good weather also saw net revenues rise 3 per cent across Europe in the quarter, with its Peroni Nastro Azzurro brand remaining popular in the UK, although sales in the region remained flat overall in the first half and interim sales by volume fell 3 per cent.
But the group revealed that the strong US dollar took its toll on reported results, with net revenues down by 9 per cent in the second quarter and half-year as a whole.
Belgium-based AB InBev – the world’s biggest beer firm – has just over a week to go to make a formal bid for SABMiller or walk away under UK takeover rules. It is thought to be working on a bid worth around £45 a share, valuing FTSE 100 listed SABMiller at more than £70 billion.
It is understood AB InBev first put forward a proposal of around £40 a share, but is now sweetening its approach after reportedly being rebuffed.
If AB InBev clinched the deal, it would rank in the top ten takeovers in global corporate history. It has until 14 October to make a formal offer, although the deadline can be extended.
SABMiller posted an 11 per cent leap in net revenues across Africa in the second quarter, while they rose 9 per cent in Latin America. Group-wide soft drinks sales by volume were 4 per cent ahead in the first half.
Chief executive Alan Clark said: “Growth accelerated in the second quarter of the year, underpinned by our unmatched footprint in the growing beer markets of the world.
“While adverse currency movements have materially impacted our reported results, we have a strong business with exceptional long-term prospects.”
Phil Carroll, an analyst at Shore Capital, said “extreme” changes in foreign currency rates would likely see City forecasts for SABMiller trimmed, but said the underlying performance at the group was “strong and might surprise some in the market”.
He remains upbeat over the chances of a tie-up between SABMiller and AB InBev, adding: “Clearly a deal of this size has its complications and execution risk but we believe these can be managed and overcome.”
AB InBev has a stable of more than 200 beers, including Beck’s, Corona, Hoegaarden and Leffe.
SABMiller has Coors, Foster’s, Miller and Bulmers cider. It employs around 69,000 people in more than 80 countries and has global annual sales of more than $26 billion (£17bn).
Its suitor and larger rival AB InBev, based in Leuven, Belgium, has a 155,000-strong global workforce and makes more than $47.1bn in global revenues. SAB attempted to acquire Heineken a year ago but its advances were rebuffed.