Industry News       English French Dutch Spanish German Russian Italian Portuguese Portuguese Danish Greek Romanian Ukrainean Chinese Polish Korean
Logo Slogan_Portuguese


CASTLE MALTING NEWS in partnership with www.e-malt.com Portuguese
18 July, 2019



Brewing news Australia & Japan: AB InBev agrees to sell its Australian operations to Japan’s Asahi

Anheuser-Busch InBev, the world's largest brewer, is selling its Australian operations to Japan's Asahi for $11 billion and could revive the stalled flotation of its Asian business as it looks to cut debt, Reuters reported on July 19.

The Belgium-based brewer, weighed down with debt after its 2016 acquisition of rival SABMiller, on July 19 said it had agreed to sell Australian subsidiary Carlton & United Breweries (CUB) at an enterprise value of A$16 billion ($11.3 billion).

The sale comes only a week after AB InBev shelved an initial public offering (IPO) to sell a 15% stake in its Asian operations, including Australia, citing factors including unfavourable market conditions.

What would have been the world's largest flotation this year, raising up to $9.8 billion for the brewer, ended up being the third-largest ever to be withdrawn. Sources close to the deal said investors had baulked at the price.

The company said on July 19 that it still believes in the rationale of offering a minority stake of Asian business Budweiser APAC, now excluding Australia, provided it could be completed at "the right valuation".

AB InBev, which had billed the IPO as a means to drive regional consolidation, said the Australia sale would help it to accelerate expansion into other fast-growing markets in the region and globally.

Without Australia, a large but mature market, AB InBev's Asia-Pacific operations would be more skewed towards faster-growth markets such as China, where AB InBev sells more Budweiser than in the United States.

With the inclusion of Vietnam and India, too, the IPO could prove more attractive than before.

Bernstein Securities analyst Trevor Stirling said the Australia business was a profitable cash cow, but an IPO without it could yield a higher valuation.

However, a question mark would remain over AB InBev's more mature South Korean business, given that it had bought it back from private equity group KKR in 2014.

The bulk of the proceeds from the Australia deal will be used to reduce debt, AB InBev said, with the deal expected to close in the first quarter of 2020.

AB InBev shares were up 4.3% at 1025 GMT, among the strongest performers on the FTSEurofirst 300 index as the stock more than recovered ground lost last week.

The brewer's net debt totalled $102.5 billion at the end of 2018 and its net debt to core profit (EBITDA) ratio was at 4.6 times. It has pledged to reduce that to less than four times EBITDA by the end of 2020 and has a long-term target of two times EBITDA.

Asahi, which previously paid 9.85 billion euros ($11.1 billion) to buy AB InBev's Eastern Europe business as well as the Grolsch and Peroni brands, already sells its Asahi Super Dry lager in Australia along with Schweppes.

It will also gain leading Australian beer Victoria Bitter (VB), placing Asahi in more direct competition there with Japanese rival Kirin s, which produces the XXXX Gold brand through its Lion subsidiary.

Asahi said the deal would be debt-free and it will issue up to 200 billion yen ($1.9 billion) of shares to fund the acquisition.

The Japanese brewer, which has been seeking overseas deals to compensate for slow growth, said net debt would temporarily exceed four times EBITDA, with its debt to equity and capitalisation ratios also expected to worsen.

AB InBev said the enterprise value of the deal represents a multiple of 14.9 times EBITDA. The pricing of its shelved IPO had applied a multiple of 16-18 times for the Asian business.

Jefferies analysts said the Australia multiple was attractive and would cut AB InBev's net debt this year to $87 billion with a net debt to EBITDA ratio of 3.9, achieving its target a year early.





Voltar



E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .














We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.     Ok     Não      Privacy Policy   





(libra 0.7383 sec.)