Hong Kong: Budweiser APAC won’t rely on M&A to grow after IPO

Budweiser APAC will not rely on merger and acquisition (M&A) deals to expand after the Asia-Pacific business of beer giant Anheuser-Busch InBev (AB InBev) lists in Hong Kong, the chief executive of the Asian business was quoted as saying by Reuters on July 4.

Budweiser Brewing Company APAC Ltd (Budweiser APAC), whose portfolio of more than 50 beer brands includes Stella Artois and Corona, began talking with investors this week about what will be the world’s largest initial public offering (IPO) this year.

Analysts have suggested the spin-off could provide the Asian company with financial firepower for M&A deals with regional beer brands, as well as providing proceeds to help parent AB InBev lower its leverage.

“We don’t depend on M&A to make it a successful company ... We don’t need to do M&A to have a very healthy growth,” CEO Jan Craps told reporters in Hong Kong.

At between HK$40 and HK$47 a share, the deal will raise between $8.3 billion and $9.8 billion for heavily-indebted AB InBev. The company is due to price the deal on July 11.

The company has said the Hong Kong listing would create a champion in the Asia-Pacific region, where sales are growing and increasingly wealthy consumers are turning to premium beer brands.

Craps said Budweiser APAC could continue to partner with regional brewers to expand to more countries.

The IPO had already drawn strong interest from investors, including large institutions, sovereign wealth funds and Chinese insurance firms, said two people with knowledge of the deal, asking not to be named as they were not authorised to speak to the media.

Budweiser APAC’s IPO will not have a separate tranche for cornerstone investors, a common feature of Hong Kong public offerings, to ensure enough liquidity for global institutional investors, said Alex Abagian, co-head of Asia Pacific equity capital markets at Morgan Stanley.

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