Yesterday, the French parliament approved a proposal to increase beer taxes by 160%, which according to the brewers might lead to an increase of retail prices by as much as 20%.
Today, (50,87 EUR, 0,24%) also announced that it has launched a mandatory unconditional cash offer for the 4.7% of APB’s issued capital it does not yet own. The Offer will remain open for acceptance until 8 January 2013 at 5:30 p.m. (Singaporean time).
The beer tax proposal was known and will impact Heinekenmore than AB InBev, due to the higher weight of France in total for . Most likely scenario now is that volumes in France will decline in 2013 (rough estimate 5-8%). We will adjust our scenario for that (revision will reduce our group estimates by less than 1% though).
The offer for the remaining APB shares comes as no surprise given already acquired control over the 39.7% stake held by Fraser & Neave and as such already detained 95.3% of APB.
remains our favourite brewing stock. Buy recommendation reiterated with € 57.0 TP.