Brazil & Belgium: Inbev is to buy back its shares and increase its ownership in AmBev

InBev S.A. announced on June 14 share buy-back program, as well as its intention to increase economic ownership in AmBev. InBev, the brewer of Rolling Rock and Stella Artois, plans to spend as much as EUR 800 million euros (US$971 million) to repurchase its own shares and raise its stake in AmBev, the Latin American beer maker the company bought last year.

Using the powers granted at the Extraordinary General Meeting of Shareholders of April 26th, 2005, InBev’s Board of Directors has decided to initiate a share buy-back program of InBev shares for an amount up to EUR 300 million. The share buy-back program will run for twelve months and may be renewed thereafter.

The Board of Directors has also decided to increase the economic ownership of InBev in AmBev over the same period, through the purchase of AmBev’s preferred shares for an amount of up to EUR 500 million. Stock in InBev climbed as much as 3.8 percent.

Commenting on the rationale for these decisions, John Brock, InBev’s CEO, said, “InBev is enhancing shareholder value by combining its strong cash-flow generation with the right capital structure.”

InBev will have cash flow before capital spending and after taxes and financial charges of 1.8 billion euros, half of which is available for buying back stock or acquisitions, analysts at Petercam said in a research report. “The decision to buy back shares supports our positive opinion, hence we reiterate our `add' rating,'' the report from Brussels-based Petercam said. “InBev remains our favorite play in the beer sector.''

The repurchases of its own stock will take place over the next year, and the beermaker may authorize further buybacks after that, according to the statement. Stock in InBev gained as much as 1.04 euros to 28.80 euros in Brussels. The shares were at 28.54 euros at 10:55 a.m. local time, giving the beermaker a market value of 17.3 billion euros. The stock has added 13 percent in the past year, about the same as the 13-member Bloomberg Europe Beverages Index. Preferred shares of AmBev climbed on June 13 11 reais, or 1.6 percent, to 683.50 reais, the highest in two months, in Sao Paulo.

About InBev:
InBev is a publicly traded company (Euronext: INB) based in Leuven, Belgium. The company's origins date back to 1366, and today it is the leading global brewer by volume. InBev’s strategy is to strengthen its local platforms by building significant positions in the world's major beer markets through organic growth, world-class efficiency, targeted acquisitions, and by putting consumers first. InBev has a portfolio of more than 200 brands, including Stella Artois®, BRAHMA®, Beck’s®, Skol®—the third-largest selling beer brand in the world—Leffe®, Hoegaarden®, Staropramen® and Bass®. InBev employs some 77,000 people, running operations in over 30 countries across the Americas, Europe and Asia Pacific. In 2004, InBev realized a net turnover of 8.57 billion euro (including four months of AmBev). For further information visit www.inbev.com.

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