The merger/takeover of ABInBev of SAB Miller in October was the largest ever such deal on the London Stock Exchange with brewing operations in some 70 countries.
What happened next?
We found out last Saturday (29th October) when the Financial Times reported ABInBev’s Q3 results.
It reported a 2% fall in earnings before the standard EBITDA. Analysts- people who in this case specialise in beer and leisure market companies- had expected a 4.5% increase.
One analyst is quoted as saying the results were the ‘weakest set of numbers we can remember in all our time covering the company’.
The main reason according to ABIn Bev was a ‘very weak result in Brazil’ its original home market. Beer volumes there were down 4.1% compared to a 3.5% increase in Q3 last year.
The FT does not of course note that in the meantime a democratically elected left-ish Government has been deposed and replaced by one fixated on pursuing an austerity agenda.
What does all this mean? As usual its too early to say except you’d expect an increased focus on costs (that is job losses primarily). The FT reports that ABIn Bev is optimistic about recovery in the Brazilian market.I wouldn’t be so sure.