Bud Light Owner’s Trading Suspended After Stakeholder Announces Sale of 35 Million Shares

AB InBev’s shares have tumbled from around $127 to roughly $61 with further downward pressure expected.

Bud Light, made by Anheuser-Busch, sits on a store shelf in Miami, Fla., on July 27, 2023. Joe Raedle/Getty Images

Trading shares of Bud Light-owner Anheuser-Busch InBev’s (AB InBev) was suspended on Thursday amid Marlboro-maker Altria’s plans to sell millions of company shares.

On Thursday, the Financial Services and Markets Authority (FSMA), Belgium’s financial regulator, suspended the trading of AB InBev’s shares on the Euronext Brussels stock exchange for a few hours from 9:00 a.m. CET to 14:00 CET.

The suspension followed a decision by major shareholder Altria announcing on Wednesday that it would sell around 35 million shares it holds in AB InBev. AB InBev shares were trading at around €58.6 (approximately $64) at the time, making the 35 million shares roughly worth $2.24 billion.

After Altria announced its intention to sell shares, AB InBev agreed “to repurchase $200 million of ordinary shares directly from Altria, concurrently with, and conditional on, completion of the offering,” Altria said in a statement.

As such, a temporary suspension of trading was instituted on Thursday, during which time AB InBev and Altria discussed the sale terms. AB InBev eventually agreed buy 3.33 million ordinary shares from Altria at a price of roughly $59. AB InBev said it intends to fund the direct buyback with cash on hand.

After the pricing was decided, AB InBev shares opened for trade at the Euronext Brussels exchange on Thursday. The company’s shares were trading at around €56.40 (approximately $61.50) as of 15:20 p.m. CET, a decline of 3.75 percent from Wednesday.

“We remain disciplined in our capital-allocation decisions and participating in this offering is consistent with our strategy,” said AB InBev CEO Michel Doukeris.

“We recently completed our $1 billion share buyback that was announced in October 2023 and will participate in this offering for a further $200 million repurchase of our shares. Altria remains a significant shareholder of our company and we look forward to continuing our important shareholder relationship with them.”

Altria had received 185 million shares in AB InBev back in October 2016 when African beer maker SABMiller was acquired by AB InBev. Altria had a stake in SABMiller.

In addition, Altria purchased 12 million more shares the same month, taking its holdings in AB InBev to 197 million, representing roughly a 10 percent stake in the brewer.

At the time, AB InBev shares were trading around the $127 level, far higher than the $61.5 it is trading currently.

As Altria’s income generated from AB InBev declined, the company shifted from viewing its stake as “strategic” to a “financial investment,” said Callum Elliott, analyst at Bernstein, according to Reuters.

In a note, James Edwardes Jones, an analyst at RBC Capital Markets, said he doesn’t find it surprising that Altria was scaling down its AB InBev stake. “On balance, we feel that this is likely to act as a short-term brake on ABI’s share price but is of minimal longer-term significance.”

Altria Stake, Bud Light Impact

After the share sale is completed, Altria will own around 8.1 percent stake in AB InBev. Altria granted underwriters of the share sale a 30-day option to buy around 5.25 million additional shares. If underwriters exercise this option, Altria’s AB InBev stake could drop further to 7.8 percent.

Altria CEO Billy Gifford said the deal was an “opportunistic transaction” which banks in a portion of its investment.

“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’s sale of AB InBev shares comes after the company reported depressing sales in the United States. For fiscal year 2023, AB InBev reported a 7.8 percent gain in revenue overall. However, revenues dipped by 9.5 percent in the United States, with fourth-quarter revenues crashing by 17.3 percent.

AB InBev attributed the fall “primarily due to the volume decline of Bud Light.” In April last year, Bud Light partnered with transgender social media personality Dylan Mulvaney in a promotional campaign. Anheuser-Busch sent custom Bud Light beer cans to the personality featuring the trans-activist’s face, a move that was criticized as pushing the transgender agenda.

As the promotional campaign went viral, criticism started to pour in and Bud Light faced boycott calls. By June, Bud Light was no longer the top-selling beer brand in the United States.

Bud Light sales during the recent Super Bowl Sunday were dismal as well, indicating that Americans continue to boycott the beer almost a year after the controversy.

In 2023, Bud Light was the top-selling brand during the Super Bowl, according to a report issued by hospitality engagement platform Union, cited by media outlets. During the 2024 Super Bowl, Bud Light sales dropped by 50 percent.

Speaking to Fox News last month, former Anheuser-Busch executive Anson Frerick criticized the company for its handling of the Bud Light controversy.

“They haven’t done a good job of climbing out of this ditch at all. You still have sales that are down 30 percent week over week, and that’s despite them last summer spending three times their planned marketing budget on Bud Light,” he said.

“The biggest problem is that they’ve lost trust with their customers, and they still haven’t gone out and personally asked for their customers to come back to them … And until they restore that trust, I don’t think this brand is going to turn around and get back to growth anytime soon.”