AB InBev Plays Down Talk of Move Beyond Beer

Anheuser-Busch InBev , the world's largest brewer which is set to buy nearest rival SABMiller, believes future acquisitions are more likely to be in beer rather than branching out into other beverages, its chief executive said.

Analysts and investors are already speculating on AB InBev's next potential target -- with possibilities ranging from spirits company Diageo, unlisted French wine and beer group Castel, which has a large African presence, and Coca-Cola .

"We've always done it within beer. We don't believe in going too much outside beer. That makes the likelihood of success in integration higher," CEO Carlos Brito told the company's annual meeting.

The comments from Brito suggested that future deals were possible but that candidates were more likely to be drawn from closer to its core business.

AB InBev, which makes Budweiser, Stella Artois and Corona, expects to seal its $100 billion-plus acquisition of SABMiller in the second half of the year.

Speculation about AB InBev's next move has been strengthened by a six million share option plan for some 65 senior managers, below the executive board, which would be granted if the company's revenue hit $100 billion in 2020, 2021 or 2022.

AB InBev's revenue last year was $43.6 billion. With SABMiller, that would be a pro-forma of $55-60 billion, including disposals, leaving a 70-80 percent hike required in a maximum of seven years.

Without further acquisitions, this would be a giant leap, particularly with currency weakness versus the dollar making any expansion this year hard to achieve.

Furthermore, with the creation of InBev in 2004 and its purchase of Anheuser-Busch in 2008, of the rest of Mexico's Modelo in 2012-2013 and SABMiller now, it has shown it tends to get the major merger bug every four years.

Brito did talk about one clear area of growth in the coming years -- low and no alcohol beers. The company has a target that these should make up 20 percent of overall revenue by 2025. It does not say what that percentage is now.

Brito said lower alcohol drinks were among the fastest growing parts of the market, such as in Germany and with the increasing popularity of Radler, typically a mix of beer and lemonade.

"There are a lot of consumer trends going in that direction," Brito said.

"And the margins are very good because you don't have the excise tax because it's non-alcohol. You charge sometimes the same price as beer or higher, depending on how you position the product."