Andrea Felsted, Columnist

AB InBev's $100 Billion Hangover

Cutting the dividend now rather than later looks the most sober course of action.

October 19, 2018 at 4:00 AM UTC

Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Previously, she was a reporter for the Financial Times.

Pouring the pints.
Photographer: Jasper Juinen

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Go sober for October, drinkers are told at this time of year. It’s a message of restraint Anheuser-Busch InBev SA/NV, the world's biggest brewer, should heed when it comes to its dividend.

The company's $100 billion takeover of rival SABMiller Plc two years ago lifted net debt to $108 billion. That might decline slightly this year, according to Trevor Stirling, an analyst at Sanford C. Bernstein Ltd., but it would still be almost five times Ebitda. That's more than the three times multiple at which investors tend to get nervous, and far above the company's own target to keep net debt at about twice Ebitda.