Market Report: Traders raise a glass to possible brewing mega-merger between AB InBev and SABMiller


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The Independent Online

Cheers! Traders raised a glass to a possible brewing mega-merger that tore up the stock-market script. Confirmation that American beer behemoth AB InBev, behind Budweiser and Stella, has approached the UK’s SABMiller, up 599.5p or 20 per cent to 3,614p, sparked life into the FTSE 100, which finished 91.61 points higher at 6229.21.

Investors were all for the deal, which would create a brewing colossus worth at least $250bn (£160bn); they snapped up shares in the brewers, as well as those of rivals such as Guinness maker Diageo, up 32.5p at 1,777.5p. But some analysts suggested the pair would have difficulty appeasing the competition regulators.

The US Federal Reserve kicked off its key two-day meeting before deciding later on Thursday whether to raise interest rates for the first time since 2006.

Dealers were expecting to put their feet up until the decision was made public, but the brewing M&A put paid to that. Trading volumes were larger than normal, as investors rushed to get in on the action.

Shares in FTSE 250 firm Stagecoach chugged 1.5p ahead to 346.7p after it extended its control over the East Midlands rail franchise until 2018 for £150m.

Entertainment One jumped 16.6p to 285.7p, as the TV and film rights group’s largest investor Marwyn sold the remaining 17.9 per cent of its shares to the Canada Pension Plan for £142.4m, at 269p a pop.

When Marwyn brought the company to AIM in 2007 with a market value of just £85m, it was a Canadian DVD, CD and video-game distributor. Several acquisitions later, Marwyn transformed Entertainment One into a FTSE 250 stalwart worth more than £1bn.

On AIM, Alkane Energy charged 10.25p or 41 per cent higher to 35.25p, as Balfour Beatty’s Barbican Bidco swooped for the UK-focused gas to power firm in a £61m deal.

Elsewhere, shares in Vislink, whose executive pay has come under fire from shareholder groups, plunged 7.13p or 13 per cent to 46.88p, as the video surveillance group swung to a loss of nearly £900,000 in the first half of 2015, compared with a profit of £2m in 2014.