SABMiller logs profits fall awaiting AB InBev takeover

British brewer SABMiller on Wednesday announced a drop in annual net profits, hit in part by costs linked to its upcoming takeover by sector leader Anheuser-Busch InBev.

Profits after tax dropped 18 percent to $2.7 billion (2.4 billion euros) in its financial year that ended March 31, the maker of Foster's lager said in an earnings statement.

That compared with net profit of $3.3 billion in 2014/15.

Chief executive Alan Clark said the year had seen "economic and currency volatility and the distraction of the AB InBev offer". In particular, SABMiller was hit by the dollar's rise against rival currencies.

SABMiller said exceptional charges of $721 million included $160 million of costs associated with the AB InBev transaction. However the bulk of the one-off costs were caused by impairments linked to investments in Angola and South Sudan.

AB InBev -- which makes Budweiser, Corona and Stella Artois -- agreed late last year to buy SABMiller for $121 billion.

With the pair facing tough regulatory hurdles, Japanese beer giant Asahi Group last month said it would buy SABMiller's Peroni and Grolsch brands.

SABMiller is selling also its stake in leading Chinese beermaker Snow Breweries, in a move aimed at persuading Chinese regulators to sign off the tie-up that is expected to complete later this year.

The European Commission is set to rule on the deal this month.

The new combined company would produce one in three beers sold globally, according to market research group Euromonitor International.

The deal comes at a time of growing pressure for consolidation in the brewing industry where craft beers made by smaller independent firms are increasingly popular.

Belgium-based AB InBev announced earlier this month that its first-quarter profits fell owing to weakness in the Brazilian market.