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Extra
Buffett buying up stock in Budweiser brewer
Anheuser-Busch shares jump on news that master investor has taken a big stake.
By Kim Khan
Is Warren Buffett partial to a cold Bud longneck? Perhaps, but it's clear he's favors the stock of the top U.S. brewer.
Buffett's Berkshire Hathaway (BRK.A, news, msgs) "has become a significant shareholder" in Anheuser-Busch (BUD, news, msgs), the maker of Budweiser said in a statement. "Anheuser-Busch welcomes Berkshire Hathaway as a shareholder," the company said.
Well, who wouldn't?
Budweiser looks like a typical Buffett holding: a consumer products market leader that enjoys consistent sales regardless of how the economy is performing. A similar stock, Coca-Cola (KO, news, msgs), is Berkshire Hathaway's largest holding. Buffett owns 200 million shares of the soft-drink maker.
See Berkshire Hathaway's holdings based on the latest regulatory filings.
Related news and commentary on MSN Money
Changing tastes cost brewer
Buffett is also getting Anheuser Busch on the cheap. The stock closed near a 52-week low on Wednesday before spiking 5% today on the Buffett news. But there's a reason for that. The company warned on full-year earnings earlier this month.
Anheuser Busch said on April 6 its profit would grow this year in the low single digits. It was the second time since February the brewer trimmed guidance.
A big problem from brewers has been loss of sales as consumer shift from beer to wine and spirits. Anheuser Busch is also facing competition from rival Miller.
Benj Steinman of Beer Marketer's Insights said that Anheuser-Busch last year lost two-tenths of a percentage point in U.S. market share -- to 49.4% -- while Miller Brewing gained one-tenth of a point to 18.5%, aggressively exchanging blows with Anheuser-Busch in marketing along the way, the Associated Press reported.
Berkshire Hathaway will hold its annual meeting on April 30. There could be questions about the companys General Re unit and its involvement in reinsurance transactions with American International Group (AIG, news, msgs) that led to the ouster of Hank Greenberg. Buffett answered questions from state and federal regulators about the transactions at an informal meeting on April 11.
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