Anheuser-Busch InBev SA/NV (BUD - Free Report) , alias AB InBev, has successfully concluded the transaction to sell its 54.5% equity stake Coca-Cola Beverages Africa (Pty) Ltd (“CCBA”) to the soft-drinks giant The Coca-Cola Company (KO - Free Report) for $3.15 billion.
Agreed upon in December 2016, the deal includes the sale of CCBA’s operations in South Africa, Namibia, Kenya, Uganda, Tanzania, Ethiopia, Mozambique, Ghana, Mayotte and Comoros. Formed in 2016, CCBA is the largest Coca-Cola bottler in Africa. It was founded by combining the African non-alcohol ready-to-drink bottling interests of SABMiller plc, The Coca-Cola Company and Gutsche Family Investments.
This transaction is likely to aid in the expansion of the Coca-Cola Company’s footprint in the aforementioned countries. Following the completion of the acquisition, Coca-Cola will hold the controlling interest in CCBA. However, the company revealed that it will temporarily hold these businesses until it finds a suitable refranchising partner. Consequently, it intends to account for these assets as discontinued operations for the time being.
However, as for AB InBev, this transaction forms a part of the asset sale agreements signed for fulfilling the antitrust commitments under the SABMiller acquisition.
Additionally, AB InBev and Coca-Cola are in the process of finalizing a deal for to sell AB InBev’s interest in bottling businesses in Zambia, Zimbabwe, Botswana, Swaziland, Lesotho, El Salvador and Honduras, to the latter. These transactions are dependent upon the receiving necessary regulatory and shareholder approvals.
Notably, the world’s largest brewer has gained 16.3% year to date. Though this Zacks Rank #3 (Hold) stock has lagged the industry’s growth of 21.2%, it has outperformed the Zacks Consumer Staples sector’s growth of 9.2%.
While the beer space has been grappling with intense competition, consumers’ changing preferences and sluggish North American growth, AB InBev has been riding on robust geographical reach and diversified brand portfolio.
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Some better-ranked stocks in the same industry include Craft Brew Alliance, Inc. (BREW - Free Report) and Boston Beer Company Inc. (SAM - Free Report) . While Craft Brew sports a Zacks Rank #1 (Strong Buy), Boston Beer carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Craft Brew has improved 8% year to date. Moreover, the company has delivered an average positive earnings surprise of 222.7% in the trailing four quarters.
Boston Beer has an average earnings surprise of nearly 50% in the last four quarters. The stock has advanced 27.3% in the last three months.
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