Tobacco Maker Sells Shares in AB InBev for $2 Billion

AB InBev’s stock dropped more than 5% Thursday after tobacco giant Altria sold nearly a fifth of its 197 million shares in the alcohol giant.

Altria, US maker of Marlboro cigarettes as well as Copenhagen and Skoal, sold around 35 million shares or around a fifth of its total holding. AB InBev plans to buy back $200 million worth of shares, news agency Reuters reported.

Belgium's Financial Services and Markets Authority (FSMA) requested that AB InBev's shares be suspended until after the publication of a press release giving details on pricing. The suspension was lifted thereafter.

In a statement, AB InBev stated Altria's underwriters would pay just under 55 euros, or $60, per AB InBev share, a discount of around 6.5% discount to Wednesday's closing price of 58.82 euros per share.

The tobacco maker said that its sale of AB InBev stocks is intended to drive value to its own shareholders.

The sale will see Altria's holding in the company reduced to around 8.1%, or 7.8% if its underwriters fully exercise an option to purchase additional securities.

Altria received cash and a stake in AB InBev in return for its holding in SABMiller when AB InBev acquired the African beer maker in 2016, also adding to its stake around that time.

Since then, when the beer giant was trading at $120-$130 per share, it has been in steady decline and traded for just over $64 per share on Wednesday.