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London - Anheuser-Busch (AB) InBev [JSE:ANB], the world’s biggest brewer, reported second-quarter profit growth that missed analysts’ estimates on challenging markets in Brazil and Argentina.
Earnings rose 4.3% to $4.01bn on an adjusted basis before interest, taxes, depreciation and amortisation, the maker of Stella Artois said Friday in a statement Friday. Analysts expected 6.9% growth.
Faced with declining popularity of its big brands in the US and western Europe, AB InBev CEO Carlos Brito has spent the past 10 months pursuing a $104bn takeover of rival SABMiller [JSE:SAB].
That bid hit a snag after the pound slumped due to the UK’s vote to leave the European Union. Earlier this week AB InBev raised its offer one last time, and SABMiller froze all contact with the company on integration, raising the possibility the largest deal in brewing history may sputter out.
The company repeated it aims to complete the acquisition this year.
AB InBev also lowered its forecast for revenue from Brazil this year, now expecting it to be little changed from last year.
Major investors including Allan Gray, Davidson Kempner Capital Management and Elliott Management said on Thursday that they are prepared to back the offer, said the people, who declined to be named because the details aren’t public.
Many shareholders view the takeover’s potential collapse as a larger risk than accepting an offer that falls short of their expectations after AB InBev said its improved offer is final, the people said.
If the deal doesn’t close, AB InBev would need to book a loss of about $10bn based on the fall of the pound, according to Susquehanna International Group analyst Pablo Zuanic. If SABMiller walks away, it loses a breakup fee of $3bn. SABMiller’s shares could also fall below £40 if the deal collapses, from about £43 Thursday, according to analyst estimates.
