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InBev delays share issue until markets calm

Tuesday, October 14, 2008 | 5:08 p.m. CDT

BRUSSELS, Belgium — Brewer InBev SA said Tuesday it was postponing a $9.8 billion share issue until financial markets stabilize.

It had planned to use the money raised from selling new shares to fund its $52 billion takeover of Anheuser-Busch Cos. — a deal that will create the world's largest brewer and bring beers Budweiser and Stella Artois under one roof.

But it said "unprecedented volatility in global capital markets" meant it could not press ahead with plans to issue new shares in October. It set no new date, saying it would continue to watch market conditions.

InBev said there was no change to its target to complete the deal by the end of 2008, once it gets approval from regulators and Anheuser-Busch shareholders on Nov. 12.

"We are moving forward confidently and expect to complete the combination of these two great companies by the end of the year," InBev CEO Carlos Brito said in a statement.

Stock markets across the world have plunged in recent weeks on worries that a banking crisis will tighten the cost of borrowing for companies and deepen a global economic slowdown.

The Leuven, Belgium-based company said it had the strong support of a group of banks that are loaning $45 billion to pay for the purchase and $9.8 billion in equity bridge financing. InBev had planned to replace the bridge loan with funds raised from the share issue.

InBev is currently the world's second-largest brewer after SABMiller PLC. Swallowing Anheuser-Busch would see it capturing half of the U.S. beer market and a fifth of China and Russia.

 


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