Sector movers: Diageo-SAB tie-up rumours lift beverages

30th Jun 2014 15:08

A potential tie-up of the beverages sector's two-largest constituents gave the category a boost on Monday, on an otherwise subdued session in London with the wider market in search of direction.Shares in Diageo and SABMiller were on the rise today, up 1.8% and 0.2% respectively, after it was rumoured that the companies could combine, creating a drinks group worth over £100bn at current market prices.It is thought that Peroni and Grolsch maker SABMiller, the larger of two with a market capitalisation of around £54bn, could be eyeing a possible merger with Smirnoff and Baileys manufacturer Diageo in an attempt to ward off an approach from drinks giant AB Inbev, which has been rumoured as a potential bidder in recent weeks.Diageo's substantial Guinness stout business would also be an attraction for the UK-listed brewer.The Financial Times cited analysts from Barclays last week who said: "A merger of the world's number one spirits and number two brewing businesses would create a potent new force in the Total Beverage Alcohol category."Other stocks in the UK beverages sector gained such as Stock Spirits, Britvic and C&C Group.Bottling firm Coca-Cola HBC also rose as it announced plans to pull its shares from the US stock market after experiencing low trading volumes. Since joining the premium listing segment of the LSE earlier this year, the UK has become the principal trading market for CCH's shares and accounted for over 85% of total trading volume in the 12 months to June 18th 2014. Top performing sectors so far todayBeverages 14,404.62 +1.06%Personal Goods 23,530.10 +1.06%Chemicals 10,191.88 +0.93%Media 6,077.86 +0.60%Food Producers & Processors 7,849.78 +0.51%Bottom performing sectors so far todayIndustrial Metals & Mining 1,127.18 -1.73%Automobiles & Parts 8,491.86 -1.04%Construction & Materials 4,111.42 -0.95%Travel & Leisure 7,280.44 -0.85%Forestry & Paper 11,449.95 -0.84%BC