All debt InBev-Anheuser deal is possible-Merrill Lynch

LONDON (Reuters) - InBev's INTB.BR $46.3 billion bid for Budweiser brewer Anheuser-Busch (BUD.N: Quote, Profile, Research) could be financed completely by debt without any need to raise equity, broker Merrill Lynch said in a research note on Thursday.

Expectations that InBev will have to raise less equity, or even none, helped boost the Belgian brewer's shares by 8.8 percent to 51.46 euros by 1325 GMT, analysts said.

Stella Artois brewer InBev announced its bid for Anheuser late Wednesday and said it will finance the deal with at least $40 billion in debt and a combination of non-core asset sales and equity financing.

But Merrill analyst Nico Lambrechts believes an all-debt deal is possible.

"InBev management are however, astute corporate financiers and they have a significant interest in InBev equity, leading us to believe it is unlikely that management will use equity financing. This is obviously key," Lambrechts said.

Initial reports some three weeks ago suggested that an eventually merged InBev-Anheuser would raise as much as $17 billion in a rights issue to part-finance the deal and this weighed heavily on InBev's shares.

Other analysts said that when InBev outlined that it would finance a deal with at least $40 billion of debt, this meant an equity issue would be a lot less than expected and so supported the shares.

"InBev's management's interest is highly aligned to the share price, and we do not believe that management will do a deal that compromises shareholder value," Lambrechts said.

Around 65 percent of InBev's shares are controlled by the Belgian Interbrew families and three key shareholders in Brazilian brewer AmBev after the two companies merged in 2004 to form InBev.

(Reporting by David Jones; editing by Rory Channing)