By Geoffrey Smith
Investing.com – If you think the stock market is a decent indicator of total market health then you're probably a bit worried this morning.
Anheuser Busch Inbev (BR :), the world's largest brewer, what would be this year's largest original public offer to date this weekend, the $ 8 billion partial spin-off of its Asian business, referring to "unfavorable market conditions."
It is the second major deal in a matter of days to be drawn, after the insurance giant Swiss Re (SIX 🙂 withdrew the listing of its British business ReAssure, which would increase over $ 3.5 billion . As the multinational brewery, Swiss Re is also due to "increased caution and weak underlying demand."
The two companies have little in common, either sectorally, cyclically or geographically. One is a mature, non-focused business ̵
AB Inbev is likely to be more controlled in the short term, as the error is another negative judgment of the market at the merger in 2015 by AB InBev and SAB Miller. The deal that saddled the merged company with one of the world's largest debt burden has failed to generate the rewards it promised: the shares are down to nearly 30% from when a period was agreed upon when rivals such as Carlsberg (CSE:), Constellation Brands ( NYSE 🙂 and Heineken (AS 🙂 has increased by between a third and a half.
AB Inbev fell 1.6% in early trading on Monday in Europe, one morning when almost all European and Asian markets were higher, profit from some better than expected Chinese data on and. It was flat at 386.12, while Germany's increase was 0.2% and it was largely unchanged.
It is not uncommon for buyers and sellers to vary according to their perception of what a business is worth, but it is always more difficult. when the seller's idea of the right price is colored by the price of a previous deal which subsequently seems to be unrealistic.
Having said that, AB Inbev's management can nevertheless be directed towards withdrawing the agreement. The company's profitability depends heavily on the exchange rate, as most of its $ 110 billion debt burden is denominated in dollars, and most of its sales come from emerging markets. With the Federal Reserve now in relief mode and strengthening of emerging markets in currency (South Africa, one of the group's main emerging markets, the test saw a five-month high on the back of Chinese data).
But while it would win AB Inbev's leadership on the narrower issue of timing, it still leaves them with a mountain to climb in delivering their long-term promises.
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