SABMiller, for instance, saw beer sales slump 7% in Europe and 0.8% in the United States, while Africa and Asia combined for 11% sales growth. Sales in China alone soared 17% in the quarter.

“While demand in Europe has dropped sharply, countries in emerging markets such as Africa and Asia have fared relatively well despite falling back from the high – one might say unsustainable rates of growth of recent years,” said SABMiller Chairman Meyer Kahn.

As a percentage of commercially produced alcohol, beer now accounts for 49.0% of the market in Africa and 32.8% in Asia, Meyer said.

In China, SABMiller’s success is largely attributable to the popularity of a Chinese beer named Snow, which recently supplanted Bud Light as the world’s most popular beer. Snow is a brand of beer brewed by SABMiller and its partner China Resources Enterprise Ltd. (OTC ADR: CRHKY) and it encompasses at least two-dozen varieties.

The only problem is that while SABMiller’s Chinese unit accounted for about 14% of sales volume, it contributed just 2% to earnings because of low pricing. But that’s something the company expects will change as sales rise.

The growth rate of beer sales in Asia over the past five years remains the highest of any region, averaging 8.4%, according to SABMiller. China, in particular, has seen beer-sales growth averaging 10.7% per year.

The “margin story is improving gradually,” SABMiller spokesman Jonathan Oates told Bloomberg News.

There’s a similar story unfolding in Africa, where total beverage volumes grew by around 10% organically. That increase has been helped greatly by particularly strong growth in Tanzania and Angola, where the company is building new brewing facilities.

SABMiller’s brewing and beverage operations cover 14 countries in Africa, with a further 19 covered through a strategic alliance with French wine-and-beer distributor Castel group.

SABMiller is the No. 1 brewer by market share in most of these countries.

The company has operations in Vietnam, a joint venture in Australia, and now exports significant volumes to South Korea and Taiwan, as well.

“We are also judiciously expanding our geographic footprint in other parts of the world where it makes sense to do so,” said Kahn. “In the past year, we’ve acquired one of the larger breweries in the Ukraine and a beer and malt operation in Nigeria, each marking our first entry to the country in question. In the case of Nigeria, the move takes us into the only major African market in which SABMiller did not previously have a presence.”

Molson Coors’ Blowout Quarter

Molson Coors is looking to broaden its geographical footprint, as well. And it’s working.

Taking a global approach to its business helped Molson Coors to more than double its profit in the second quarter from a year ago. Second-quarter profit at Molson Coors jumped 136.3% to $187.3 million from $79.4 million in 2008. Underlying after-tax income rose 20.6% to $205.4 million or $1.11 per diluted share, up from $170.3 million, or 92 cents per diluted share a year ago.

Those gains came despite sales volume declines of 2.9% in Canada and 12.4% in the United Kingdom – two of the company’s biggest markets.

Molson Coors’ joint venture with SABMiller, known as MillerCoors, was also a big help.

The two companies struck a deal last July that combined the shipping, transportation, and brewing resources of America’s two largest breweries. Now, instead of being shipped from Denver, Coors Light can be made and shipped out of Miller’s East Coast production plants, saving on shipping.

The companies predicted $50 million of cost savings in the first year of the joint venture, but had reached $78.4 million by March of this year. Miller and Coors now expect cost savings to be $128 million in the first year, and have shaved six months off their three-year goal of saving $500 million.

MillerCoors reported underlying net income, excluding special items, increased by 16.4% to $325 million. Even more impressive, the company grew its global markets business by 18% in the second quarter, thanks in large part to strong Coors Light sales in China.

“For Molson Coors Brewing Co., it’s been an unqualified success,” Sam Walker, the beermaker’s chief legal officer and managing director, told the Denver Business Journal. “Our objectives of brand-building take time, but we’re starting to see evidence that giving more choice to consumers in many markets is ultimately going to lead to success.”

Another way Molson Coors expanded choices for its customers was by obtaining the exclusive distribution rights to Singha, a Thai lager that has 95% distribution in Thai restaurants.

“For our customers, its positioning as an authentic brand offers an opportunity to build their retail offer around high value, growing Thai, Japanese and Asian Far Eastern food occasions, as well as becoming part of a valuable ‘World Beer’ segment,” the company said.

Singha joined Molson Coors’ portfolio of 10 specialty beers that make up the Different World Drinks Co., a business-to-business company that aims to promote foreign beers to bars and retailers. The other nine beers consist of:

• Blue Moon.
• Dos Equis Lager.
• Dos Equis Ambar.
• Groelsch.
• Groelsch Weizen.
• Kasteel Cru.
• Kasteel Cru Rose.
• White Shield.
• And Zatec.

Molson Coors has also hired Adeye – a mobile marketing company with offices in Norway, Sweden and Denmark – to promote the line of beers.

Stock Prices Rebound

Both SABMiller and Molson Coors have seen their stock prices race back from their early-March lows, a period in which the benchmark Standard & Poor’s 500 Index has rebounded 49%.

Since bottoming at $31.44 each on March 16, Molson Coors’ shares have slightly lagged the S&P, though they’ve surged a still-respectable 46%. Molson Coors closed yesterday (Monday) at $45.79.

SABMiller has performed even better. From their March 9 nadir of $12.44, SABMiller shares have zoomed 80%, closing yesterday at $22.33. And they’re up 32% so far this year – easily outdistancing the benchmark S&P (+10%) and rival Molson Coors (-6.0%).

Analysts have established a consensus one-year target price of $50.56 for Molson Coors shares, which would represent a gain of about 10% from yesterday’s close. The Denver-based firm’s shares feature a 2.1% dividend yield.

Source: With an Emerging Markets Foray, Molson and SABMiller Quench Their Thirst for Global Growth

• Live Nation Inc. (LYV), the world’s largest concert promoter, said it is buying Ticketmaster Entertainment Inc. (TKTM), the world’s largest ticketing company, for $2.5 billion including debt, Reuters reported. The merger will create a music powerhouse, already unpopular with fans and likely to receive intense scrutiny from government antitrust investigators.

• China inflation continued slowing in January, rising 1%, the slowest pace in nearly seven years. “Inflation could have been close to zero or worse if not for the Chinese New Year, because vegetable prices and grain prices went up,” Wang Tao, China economist at UBS AG in Beijing, told Bloomberg.

• MillerCoors, the U.S.-targeting joint venture between Molson Coors Brewing Co. (TAP) and SABMiller plc (ADR:SBMRY), said fourth-quarter profit slid 40%. The fall is mainly due to the costs to integrate the brands and impairment charges to its Sparks brand, the Associated Press reported.

• Switzerland’s largest bank, UBS AG (UBS), said it plans to cut another 2,000 jobs, this time at its security unit. Chief Executive Officer Marcel Rohner said the bank will return to profit in 2009, aided by help from the Swiss government to split off toxic assets, Bloomberg reported.

• Prices of call options to buy gold have almost doubled since Jan 15, as financial turmoil boosts demand for the precious metal, Bloomberg reported. Options contracts that allow holders to buy 100 ounces of gold for $1,000 each by April  traded as high as $17.50 yesterday on the New York Mercantile Exchange, as compared with $7.70 on Jan. 15. In that same period, options contracts that allow traders to sell gold at $800 by April plunged 82 percent.
• Oil prices fell below $39 a barrel on Tuesday after the U.S. Energy Information Administration revised downward its 2009 global oil demand forecast by 400,000 barrels per day predicting demand will fall by 1.17 million bpd from 2008, Reuters reported. The agency said it revised its demand forecasts on concerns the U.S. stimulus plan unveiled by the Obama administration will not stem the recession.  U.S. crude fell 63 cents to $38.93 a barrel. London Brent traded down 1 cent to $46.01 a barrel.
• Wal-Mart Stores Inc. (WMT) is cutting 700 to 800 jobs at its home office in Arkansas, as the world’s largest retailer looks to realign its corporate structure and reduce costs, Reuters reported. The discount retailer, which has roughly 14,000 employees at its headquarters, is eliminating jobs in merchandising, real estate and marketing in its Wal-Mart U.S. division, while cutting merchandising positions at its Sam’s Club division.
• Cisco Systems Inc. (CSCO) the giant network equipment maker, launched a surprisingly large $4 billion debt sale on Monday, raising speculation that was poised to make an acquisition, Reuters reported.  The offering came on the same day Cisco said it would offer senior notes to help pay back $500 million of debt due this month. The company said it would also use the proceeds of the offering to bolster its domestic cash position of $3 billion to $4 billion.

Source: Global Investment News Briefs Wednesday, February 11th, 2009

• Siemens AG (SI) put aside nearly $1.3 billion to settle charges that it bribed government officials around the world to win contracts. The concessionary provision will affect earnings for the year ended Sept. 30, Bloomberg reported.

• Internet titan Google Inc. (GOOG) announced Wednesday (yesterday) that its wariness for antitrust-related legal battles ultimately killed discussions with Yahoo Inc. (YHOO) about forming an advertising partnership, the New York Times reported. The breakdown reopens the door for a possible Yahoo-Microsoft Corp. (MSFT) relationship, which also has its share of starts and stops.

• Enbridge Inc. (ENB) announced quarterly profits rose 88% and net income spiked $130.4 million, or 41 cents a share, for the third quarter, Bloomberg reported. Canada’s largest pipeline company said volume increased 33% on the Athabasca liquid pipeline system, a major artery into one of the world’s most oil rich fields.

• The FCC voted 5-0 in approval of Sprint Nextel Corp’s (S) June purchase of Clearwire Corp., MarketWatch reported. The merger is critical to the survival of both, as they claimed to be unable to build a mobile wireless Internet network that could compete with rival AT&T (T).

• GMAC Financial Services, a division of General Motors Corp. (GM) said yesterday (Wednesday) that its third-quarter loss widened to $2.52 billion. GMAC had a loss of $1.6 billion during the year-earlier period. Third-quarter revenue fell 24% to $1.72 billion from $2.25 billion. GM reports earnings tomorrow (Friday).

• Time Warner Inc. (TWX) reported net income of $1.07 billion, or 30 cents a share, for the three months ended Sept. 30. Revenue was at $11.71 billion, relatively unchanged from last year’s  $11.68 billion. The company reported 18% growth in profits from continuing operations.

• Molson Coors Brewing Co. (TAP) yesterday (Wednesday) announced a 28% increase in third-quarter profit. The company reported third quarter net income of $173.2 million, or 94 cents per share, up from $134.7 million, or 74 cents per share, a year ago.

• News Corp. (NWS) said yesterday (Wednesday) that first-quarter net income dropped 30% from a year ago. Net income fell to $515 million, or 20 cents per share, compared with $732 million, or 23 cents per share, in the year-earlier period. Revenue rose 6.3% to $7.5 billion.

Source:Global Investing Roundups Thursday, November 6th, 2008

The boards of both the St. Louis-based Anheuser-Busch and InBev have approved the all-cash deal, according to a joint statement released today (Monday).

Anheuser-Busch’s popular Budweiser and Bud Light beers will join InBev’s stable of beers that includes such well-known brand names as Stella Artois, Beck’s and Brahma. The resulting merger will produce the largest beermaker by volume, as the newly formed entity will surpass the current title-holder, the British-owned SAB Miller PLC (OTC: SBMRY).

“Together, Anheuser-Busch and InBev will be able to accomplish much more than each can on its own,” InBev Chief Executive Officer Carlos Brito, who will helm the new company, said in a joint statement. “We have been successful business partners for quite some time, and this is the natural next step for us in an increasingly competitive global environment.”

The takeover battle has been hotly contested for months in both the boardroom and the courtroom since InBev’s original $46 billion offer for Anheuser-Busch in May. Fierce opposition from the board, led by Chief Executive Officer August Busch IV, was finally overcome by InBev’s bid increase of 7.7% and the Belgian brewer’s agreement to name the newly formed global entity Anheuser-Busch InBev.

“This is about giving InBev a U.S. presence and this is the most effective way they can see to achieve that,” Grant Saligari, a beverage industry analyst at Commonwealth Securities Ltd. in Sydney, told Bloomberg News. “Consumers are very emotionally attached to their beers. A peaceful deal helps maintain that.”

Aneheuser-Busch and InBev Merger Just One of Many

This merger is the latest in a string of consolidations in the largely mature global beverage industry, as skyrocketing grain costs and softening economies have led struggling brewers to seek economies of scale. Two of the largest brewers, InBev and SAB Miller, are themselves creations of mergers that took place within the past 10 years, The New York Times reported.

In January, Carlsberg A/S and Heineken N.V. (HINKY) agreed to buy Scottish & Newcastle PLC for $15.4 billion. Late last year, British-owned SAB Miller PLC (OTC: SBMRY) and Canada’s Molson Coors Brewing Co. (TAP), agreed to merge their U.S. brewing operations.

Once InBev acquires Anheuser-Busch, it will leave The Boston Beer Co. Inc. (SAM), maker of the popular Samuel Adams beer brand, one of the last large domestic brewers still under U.S. ownership.

Source: InBev Finally Woos Anheuser-Busch with Higher Offer, Top Billing

On Sunday Anheuser-Busch (BUD) accepted a $49.9 billion takeover bid from Belgian-based InBev (INB). This consolidation in the market has sent brewery stocks rallying while US benchmark indexes tumble.

If the takeover goes through, Ian Davis  in The Growth Stock Wire says InBev will be the undisputed leader in the global market. This is not only a safe option during an economic downturn, but it’s also a great way of investing in emerging markets…

I’ll start today’s column with an incredible statistic… 48.

Forty-eight is how many out of every 100 domestic beers sold in America are made by Anheuser-Busch (NYSE:BUD).

This is why, along with companies like Nike (NYSE:NKE), Coca-Cola (NYSE:KO), and Harley-Davidson (NYSE:HOG), Anheuser-Busch is one of the most valuable brands ever created… And it’s why a Belgian brewery will most likely be the proud owner of the company.

On Friday, InBev (EBR:INB) – which makes Stella Artois and Beck’s – got a little closer to acquiring Anheuser-Busch. InBev is the world’s second-largest brewery by volume sold.

This consolidation talk has been bullish for the beer sector. As the following chart shows, an index of brewers is up 13% since February. The S&P 500, on the other hand, is down 10.8% over the same period.

Brewers Have Soared 13% Since February

This strength is a classic case of a “defensive” sector doing its job. Here’s the argument: In tough economic times, consumers tend to cut down on expensive motorcycles and boats, but they’ll keep drinking beer. (If they’re behind on their subprime loan payments, they may even increase their beer intake.)

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Anheuser-Busch isn’t solely responsible for the Brewery Index’s strong performance. Since February, Boston Beer (NYSE:SAM) is up 6.9%, Molson Coors Brewing (NYSE:TAP) is up 16.3%, and Constellation Brands (NYSE:STZ) is nearly flat at -1.4%. This is actually fantastic performance when the S&P 500 is cratering.

These shares are also doing well because speculators are betting more consolidation is in the works. Whether this consolidation happens or not, you should still consider a position in breweries. They’re simply one of the steadiest sectors in the market… especially during a recession.

Consider that Anheuser-Busch’s earnings grew from $1.33 per share in 2000 to $2.44 per share in 2003, during the dot-com crash. And here’s a look at how its stock and other major alcohol distributors performed.

Performance from March 2000 to March 2003 Boston Beer (SAM) 81.8% Molson Coors Brewing (TAP) 10.0% Constellation Brands (STZ) 93.3% S&P 500 -40.5%

As you can see, breweries are a solid recession investment. (They’re also a phenomenal way to invest in emerging markets. A single company often dominates an emerging-market’s beer industry.)

Brewery stocks are getting too much media attention these days (because of the Anheuser-Busch story)… so I won’t be surprised if they move lower over the next few weeks.

However, if the takeover goes through, InBev may be an interesting investment opportunity as the world’s undisputed king of beers. If you buy this stock – and others like it – you’re getting in on one of the world’s steadiest trends.

Source: A Simple Investment That Can Soar in a Recession

As a sign of the times, InBev’s Chief Executive Carlos Brito did it with style – appearing on an interview-style video on InBev’s web site that directly addresses the fears of the legion of Anheuser workers and drinkers – jobs, foreign ownership, brand synergy.

“I think what’s in important here is that Budweiser the beer will continue to be brewed in the same brewers – we don’t have plans to close any brewers – by the same people according to the same recipe,” Brito said. 

The proposed merger, which appraises Anheuser at a 35% premium, is a combination of high performance and common sense, he said.

“This company is going to be the world’s leading brewer,” Brito noted, calling the merger a natural step. “It’s going to be among the top five consumer goods companies in the world.”

InBev’s line of beers includes Stella Artois, Beck’s, Hoegarden and Brahma.

Anheuser is the maker of Budweiser, Busch and Michelob brands. It also owns a 50% share in Grupo Modelo, Mexico’s leading brewer, and a 27% share in China brewer Tsingtao, whose namesake beer brand is the country’s best-selling premium beer.

News of the proposal sent shares of both companies up in morning trading today (Thursday). And that’s a more elemental to the proposal than before now that the long-time Busch family-run brewer owns only 3.5% of the company’s shares.

Instead, the top shareholder is Warren Buffet’s Berkshire Hathaway (BRK.A, BRK.B) with a 5% stake. And with controlling power dispersed, it’s much easier for shareholders to push the deal through.

Anheuser-Busch said in a statement that its board of directors will evaluate the proposal carefully and in the context of all relevant factors, including the company’s long-term strategic plan.

“The board will pursue the course of action that is in the best interests of Anheuser-Busch’s stockholders” and “expects to make its determination regarding InBev’s proposal in due course.”

Beverage Providers Stirring Global M&A

Yesterday, (Wednesday), Merrill Lynch & Co. Inc. (MER) analysts said that Foster’s Group Ltd. (OTC: FBRWY) – Australia’s biggest beer and wine maker – may be a takeover target after it conducts a review of its wine business.

Earlier this week, Foster’s cut its earnings forecast and announced a $730 million write-down of its wine unit, causing Chief Executive Officer and Executive Director Trevor Louis O’Hoy to announce his resignation from his post.

Should Foster’s put itself on the block, it would join Anheuser, InBev and other major global beverage providers that have been on the giving and receiving end of billion-dollar buyout offers.

In March, France’s Pernod Ricard SA won a highly contested auction to buy V&S Group – makers of Absolut vodka and Cruzan rum – from the Swedish government for $8.9 billion.

In January, Carlsberg A/S and Heineken N.V. (OTC: HINKY) agreed to buy Scottish & Newcastle PLC for $15.4 billion.

And late last year, British-owned SAB Miller PLC (OTC: SBMRY) and Canada’s Molson Coors Brewing Co. (TAP), agreed to merge their U.S. brewing operations.

Source: InBev Offers Anheuser $46.3 Billion, a Deal That Would the Create World’s Largest Brewer

European beermaker InBev is the world’s largest brewer. Its stable of beers includes such well-known names as Stella Artois, Beck’s and Brahma.

“The two companies would represent an excellent geographic fit,” Wim Hoste, an analyst at KBC Securities, part of KBC Groep NV in Brussels, said in a telephone interview with Bloomberg News. “The black hole for InBev is the [United States]. Buying Anheuser-Busch would fill up the last major hole in their geographic portfolio.”

Should the two brewers merge, the resultant entity would be a globally focused player that sends out 350 million hectoliters of beer annually and generates approximately $20 billion in annual revenue, MarketWatch reported.

Analysts are already expecting opposition from Anheuser’s fiercely independent President and Chief Executive Officer August Busch IV. But if Busch refuses to commence friendly talks, InBev would then be prepared to go straight to key shareholders with its $65 per share bid, The Financial Times’ Alphaville blog reported, citing unnamed sources.

Management opposition isn’t the only problem that could derail this merger, Craig Hutson, an analyst at GimmeCredit.com, said in a MarketWatch report.

“The cultures are vastly different,” Hutson said. “Anheuser-Busch was founded by a family that has deep beer roots and a focus on building brands and treating its employees well. Inbev is a global amalgamation of acquisitions that is intently focused on reducing costs while incentivizing employees to drive higher profits.”

Hutson wrote that, while a deal would be “a good geographic and product fit, we believe there are too many impediments.”

Shares of Anheuser-Busch gained $4.03 each, or 7.66%, to close at $56.61 on Friday. The stock has traded between $45.55 and $58.00 in the past 52 weeks.

The proposed merger is the latest in a string of consolidations in the largely mature global beverage industry. In January, Carlsberg A/S and Heineken N.V. (HINKY) agreed to buy Scottish & Newcastle PLC for $15.4 billion. Late last year, British-owned SAB Miller PLC (OTC: SBMRY) and Canada’s Molson Coors Brewing Co. (TAP), agreed to merge their U.S. brewing operations.

If Anheuser-Busch is acquired by InBev, it will leave The Boston Beer Co. Inc. (SAM), maker of the popular Samuel Adams beer brand, as one of the last large domestic brewers that still has American ownership.

Source: Global Beer Titan InBev to Make $46 Billion Offer for No. 1 U.S