Altria plans to sell 35M Anheuser-Busch InBev shares

Henrico County-based Altria Group announced Wednesday it hopes to sell 35 million ordinary shares in Anheuser-Busch InBev in a public offering. The proceeds — estimated by Bloomberg at up to $2.2 billion — will go toward repurchases of Altria’s common stock, according to the Fortune 500 company’s statement.

Altria, parent company of tobacco manufacturer Philip Morris USA, currently holds about 197 million shares of ABI, or approximately 10% of Anheuser-Busch InBev. The Belgian beer giant owns several global brands, including Budweiser, Stella Artois and Michelob.

In Wednesday’s announcement, Altria says it plans to grant underwriters the option to purchase up to 5.25 million more ABI shares owned by Altria, and ABI has agreed to repurchase $200 million of ordinary shares directly from Altria contingent on the completion of the sale.

With the sale of 35 million shares, Altria would be shedding 17.8% of its InBev holdings, and the additional sale of 5.25 million shares to underwriters would amount to 20.4%. In 2016, Altria purchased approximately 12 million ordinary shares of ABI, giving Altria about 10.2% ownership of the brewer. Altria owned approximately 27% of SABMiller, which produced Miller Lite, Coors and Blue Moon, before ABI purchased SABMiller in 2016.

Altria has agreed to a 180-day lockup with the lead underwriter for its remaining ABI shares, the statement says. Morgan Stanley is acting as the lead underwriter for the offering, and JPMorgan Chase is also an active underwriter.

“As good stewards of shareholder capital, we consistently review options to unlock the value of our ABI investment, and we believe this is an opportunistic transaction that realizes a portion of the substantial return on our long-term investment,” Altria CEO Billy Gifford said in a statement. “Over the decades of our ownership, the beer investment has provided significant income and cash returns and supported our strong balance sheet. Our continued investment reflects ongoing confidence in ABI’s long-term strategies, premium global brands and experienced management team.”

Altria reported $24.5 billion in revenue in 2023, and it has focused more attention in recent years on alternative tobacco products, as cigarette smoking continues to decline in the United States.

Last June, Altria purchased NJOY Holdings, a manufacturer and distributor of e-cigarettes and vaping products, a move that came after Altria settled more than 6,000 lawsuits related to its 35% stake in Juul Labs in May 2023 for $235 million. Altria purchased the stake in 2018 for $12.8 billion, but months later, Juul’s value plummeted under an avalanche of civil lawsuits over accusations that its products were being marketed to minors, leading to widespread vaping addiction among teens.