Belgium-based brewer Anheuser-Busch InBev (AB InBev) will divest Carlton & United Breweries (CUB), its Australian subsidiary, to Japanese beer and beverage producer Asahi for AUD$16 billion (US$11.3bn).
This will grant Asahi the rights to commercialise the portfolio of AB InBev’s global and international brands, such as Foster’s, Victoria Bitter, Carlton, Corona, Leffe and Stella Artois in Australia.
This follows AB InBev’s decision to suspend an initial public offering (IPO) of its Asian operations, including Australia. The company said factors, such as market conditions, had stalled its plans to sell off 15 per cent of its Asian business. AB InBev said it still believes in the rationale of a potential offering of a minority stake of Asian business Budweiser APAC, excluding Australia, provided it could be completed “at the right valuation”.
After the 2016 acquisition of closest rival SABMiller, AB InBev has been weighed down by debt, with net debt totalling US$102.5bn at the end of 2018 and its EBITDA ratio was at 4.6 times. It has pledged to reduce that to less than four times EBITDA by the end of 2020 with a long-term target of two times EBITDA.
Headquartered in Melbourne, CUB joined AB InBev in 2016 as part of the company’s takeover of SABMiller. CUB is one of the largest players in the Australian beer industry, alongside Coopers and Kirin-owned Lion. The three account for nearly 80 per cent of sales volume in the country.
The proceeds of the transaction, which is expected to close by the first quarter of 2020, will be used by AB InBev to pay down debt. Additionally, AB InBev says the divestiture will allow it to accelerate its expansion into other fast-growing markets, both in APAC and worldwide.
Carlos Brito, chief executive of AB InBev, said: “We continue to see great potential for our business in APAC and the region remains a growth engine within our company. 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.”
Asahi has been increasing its global presence over recent years, with the acquisition of former SABMiller brands Peroni, Grolsch and Meantime and SABMiller’s central and European business in 2016, following AB InBev’s acquisition. Earlier this year, Asahi also acquired UK-based Fuller’s beer business.