In a strategic move, tobacco giant Altria is set to offload 35 million shares of AB InBev, currently owning around 10% of the world’s largest brewer, valued at approximately $12.7 billion.
The decision comes amidst a challenging period for AB InBev’s flagship brand, Bud Light, which experienced a sales downturn following a boycott in the United States due to its collaboration with transgender influencer Dylan Mulvaney.
Altria’s Chief Executive, Billy Gifford, described the sale as “an opportunistic transaction that realizes a portion of the substantial return on our long-term investment,” underscoring confidence in AB InBev’s strategic direction and premium brand portfolio.
Additionally, AB InBev revealed in a regulatory filing its agreement to repurchase $200 million of its shares from Altria.
Despite challenges in the US market, where Bud Light faced a 9.5% decline in annual revenues, AB InBev reported a global revenue increase of 7.8% for the year, propelling 2023 profits to over $6.1 billion. Notably, AB InBev boasts a diverse brand portfolio, including Beck’s, Corona, and Leffe, alongside Bud Light.
The backlash against Bud Light was sparked by the brand’s distribution of personalized beer cans to Dylan Mulvaney, leading to a surge in criticism and a subsequent decline in sales. Industry analysts observed a shift in consumer preferences, with Modelo, a rival brand, overtaking Bud Light as the top-selling beer in the US, while competitors such as Coors Light and Miller Light made significant gains.
Criticism of Bud Light’s marketing strategy extended beyond commercial concerns, with many on the right condemning the brand for aligning with what they perceived as “woke” ideology. The term “woke,” originating from the US, refers to being socially aware of injustice and discrimination, particularly regarding issues such as racism and sexism. The company’s response to the backlash, including placing executives associated with the collaboration on leave, further fueled debate and polarization.
Following the announcement of Altria’s share sale, AB InBev’s US-listed shares experienced a decline of nearly 4% in extended trading on the New York Stock Exchange, reflecting investor sentiment amidst ongoing challenges in the beer market.
