European stocks rise as SABMiller takeover brews

European stock markets advanced Wednesday as investors toasted news that Belgian-Brazilian drinks giant AB InBev was brewing a blockbuster takeover bid for Britain's SABMiller.

London's FTSE 100 index rose 0.72 percent to 6,181.70 points in midday deals, Frankfurt's DAX 30 climbed 0.38 percent to 10,226 points and the CAC 40 in Paris grew 1.10 percent to 4,619.70.

SABMiller's share price rocketed by more than a fifth in London, topping the FTSE risers' board, after it revealed that Anheuser-Busch InBev intended to make a bid.

Shares jumped 20.29 percent to 3,626 pence as investors reacted to the surprise news.

Across in Brussels, AB InBev's share price leapt 8.63 percent to 102.60 euros.

The blockbuster takeover would combine the world's biggest brewer, AB InBev, with the second biggest SABMiller. The pair's combined stock market value is about $245 billion (218 billion euros) according to Tuesday's closing share prices.

A potential deal would bring together AB InBev's Budweiser, Corona and Stella Artois beers with SABMiller's Foster's, Grolsch and Pilsner Urquell.
"These deals always provide a boost to sentiment, especially during such a pessimistic period for the markets," said analyst Craig Erlam at traders Oanda.

"SABMiller is also one of the larger constituents of the FTSE 100 and the world’s second largest brewer so this is a very big deal," Erlam told AFP.

"It will be interesting to see whether the sell-off in the markets over the last month will prompt any more takeover talk which could further boost sentiment in the coming weeks."

European equities were also buoyed on Wednesday by bumper Chinese gains on the eve of a key US interest rate call.

Shanghai stocks soared 4.89 percent, halting a two-day slump as investors returned to the market amid speculation of state-led buying, dealers said.
Wall Street finished with decisive gains Tuesday on modestly higher US retail sales ahead of the Fed's latest monetary policy announcement.

"It's been a strong start for London's FTSE 100 with last night's strong finish on Wall Street and a late spike in Chinese markets just ahead of the close helping drive the gains," said Tony Cross, analyst at dealing group Trustnet Direct.

Swiss miner Glencore meanwhile fell back, reversing earlier gains, after announcing it had raised $2.5 billion via a shares sale as part of its vast debt-slashing plan.

London-listed Glencore said in a statement that it had sold new shares worth about £1.6 billion or 2.2 billion euros in order to pay down debt.

The company, which has lost 57 percent of its market value this year, is grappling with tumbling commodity prices as China's economic slowdown weighs on demand and sparks havoc across markets.

In midday deals, Glencore shares slid 0.66 percent to 127.20 pence.