AB InBev sells Australia unit to Asahi Group for $11.3 billion

20 Juillet, 2019, 18:57 | Auteur: Auguste Feret
  • Anheuser-Busch InBev contemplating asset sales after Asia IPO is called off: report

Carlton & United Breweries, whose brands include Foster's and Victoria Bitter, accounts for nearly half the beer market in Australia.

AB InBev was planning to list its Asia business on the Hong Kong stock exchange in attempt to raise as much as $US10 billion.The company said in a statement it was backing out of the IPO partially because of "prevailing market conditions".

Shares of BUD stock opened at $89.34 on Friday. Sources close to the matter said investors had baulked at the price.

So far those moves haven't plugged the leak, with Bud shipments in the US continuing on a three-decade decline, according to Beer Marketer's Insights.

AB InBev has signalled that the world's largest beer market, China, is a key focus of the company's efforts to boost growth, particularly given the increasingly challenging conditions prevailing in its traditional markets - Europe, the United States and Brazil. The transaction is expected to close by the first quarter of 2020. It is already the company's second-largest overseas market behind Europe. Investors have also questioned the company's business model, saying it is too focused on cost-cutting and dependent on acquisitions for growth. Lazard and Freshfields Bruckhaus Deringer worked with AB InBev.

Australia accounts for an estimated 27% of AB InBev's profit in Asia, according to brokerage Sanford C. Bernstein.

Anheuser-Busch North America CEO Michel Doukeris on growth in China, the impact of aluminum tariffs and the outlook for the company in the USA market.

AB InBev said the funds raised from the mega-money sale will be used to "pay down debt", but stressed the business is not relying on this sale to stay afloat.

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InBev said the CUB sale would help trim its debt load.

AB InBev ultimately hopes to shrink it debt to about $80 billion, according to a person familiar with its thinking.

The logo of Anheuser-Busch InBev is pictured inside the brewer's headquarters in Leuven, Belgium, Feb. 28, 2019. The Journal reported that Japan's Asahi in May expressed interest in buying the Australia business, and that AB InBev was approached the same month by private-equity firm KKR & Co. about buying some Asian assets. The deal will help Asahi, which is a dominate beverage seller in Japan, expand to global markets.

In a statement, AB InBev CEO Carlos Brito said the Asia Pacific "remains a growth engine within our company". Tooheys is now owned by Japanese brewer Kirin. The Tokyo-based company announced a $327 million deal to acquire the beer and cider business of London-based Fuller Smith & Turner in January. Asahi also sells Asahi Super Dry and local craft brands like Cricketers Arms.

The sale to Asahi is expected to completed in the first quarter of 2020.

Anheuser-Busch InBev ABI.BR , the world's largest brewer, has agreed to sell its Australian operations to Japan's Asahi 2502.T and is interested in reviving the stalled flotation of its Asian business.

The deal is still subject to scrutiny by the Australian Competition and Consumer Commission and the Foreign Investment Review Board.

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