Pound climbs as AB InBev agrees to buy SABMiller

London - The pound advanced to the highest level in three weeks against the dollar as Anheuser-Busch InBev NV agreed to buy SABMiller for about £68bn, boosting demand for the UK currency.

Sterling climbed versus 12 of its 16 major peers on Tuesday, erasing earlier declines against the dollar and the euro, as the Budweiser maker agreed to pay £44 a share in cash for a majority of the shares in its nearest competitor.

A report later on Tuesday will show UK consumer prices stagnated in September, according to the median estimate of economists in a Bloomberg survey.

The pound “moved on confirmation a deal had been reached,” said Josh O’Byrne, a London-based currency strategist at Citigroup. “This comes given the size of the deal is expected to be quite large as far as cross-border M&A goes.”

The pound rose 0.2% to $1.5384 as of 09:10, and touched $1.5388, the highest level since September 22. The currency earlier fell as much as 0.3%.