Altria Discloses 9.6% Stake In AB InBev

By Markets MarketWatch Pulse

Altria Group Inc. said Tuesday that it owns a 9.6% economic and voting interest in Anheuser-Busch InBev S.A. ADR , or 185,115,417 restricted shares, now that the merger with SABMiller plc is complete. Altria will use the equity method of accounting for its AB InBev stake, with the results reported at a one-quarter lag due to a later recording time for AB InBev results. The timing lag won't impact Altria's cash flows or quarterly dividend, the company said, but will have an effect on year-over-year comparisons of reported and adjusted EPS in the short term. The tobacco company is expanding its current $1 billion share repurchase program to $3 billion, expected to be completed by the end of the second quarter of 2018. Altria is receiving $5.3 billion in pre-tax cash from the AB InBev deal and expects to record a pre-tax gain in reported earnings of $13.7 billion, or $4.55 per share, with all of it recorded in the fourth quarter of 2016. Altria is expecting full-year 2016 adjusted EPS in the range of $2.98 to $3.04, from $3.01 to $3.07. The company maintains its goal of an adjusted annual EPS growth rate of 7% to 9%. Altria's Chief Executive, Marty Barrington, and its Chief Financial Officer, Billy Giffords, have been appointed to the AB InBev board of directors. Altria shares are up 0.3% in premarket trading and up 6.1% for 2016 so far. The S&P 500 Index is up 5.9% for the year to date.

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