AB INBEV SELLS CUB TO ASAHI

The world’s biggest brewer, Anheuser-Busch InBev (ABI), has agreed to sell Carlton & United Breweries (CUB) to Asahi for $AU16 billion.

Talks on the deal began in April, between Lazard for ABI and Rothschild for Asahi.

Agreement was reached this week following ABI’s decision to shelve its $US10bn IPO in Hong Kong.

In a statement it said the sale of CUB will “accelerate its expansion into other fast-growing markets in the APAC region and globally”.

ABI continues to consider acquiring a minority stake of Budweiser Brewing Company APAC (excluding Australia).

“We continue to see great potential for our business in APAC and the region remains a growth engine within our company,” offers Carlos Brito, ABI CEO.

“With our unparalleled portfolio of brands, strong commercial plans and talented people, we are uniquely positioned to capture opportunities for growth across the APAC region.”

The sale of CUB to Asahi Group Holdings for $16.0bn ($US11.3bn) represents an implied multiple of 14.9x 2018 normalized EBITDA, currently reported at $2.294bn.

The deal includes ABI licensing brands such as Corona, Stella Artois and Budweiser to Asahi.

The Belgium-based company will use the bulk of the proceeds to pay down debt. It cites a commitment to reach a net debt to EBITDA target ratio of below 4x by the end of 2020, which it says is not dependent on the completion of this transaction.

CUB was bought by Foster’s in 2004. In 2011 the entire entity was bought by South African-based SAB Miller for $11bn.

In 2016 SAB Miller was acquired by ABI in a battle of the giants.

Asahi is thought to have been considering further acquisitions in the Australian market for some time, and has now committed financing to the CUB deal.

It recently bought European labels Peroni and Grolsch from ABI for $US3bn.

Following closing conditions including regulatory approvals in Australia, the transaction is expected to be completed first quarter of 2020.

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