AB InBev agrees to sell Australian business to pay down debt

Anheuser-Busch InBev contemplating asset sales after Asia IPO is called off: report

Anheuser-Busch InBev contemplating asset sales after Asia IPO is called off: report

19 July 2019 - Anheuser-Busch InBev (Euronext: ABI) (NYSE: BUD) (MEXBOL: ANB) (JSE: ANH) has agreed to divest Carlton & United Breweries (CUB), its Australian subsidiary, to Asahi Group Holdings, Ltd. for 16.0 billion AUD, equivalent to approximately 11.3 billion Dollars, in enterprise value.

The deal gives Asahi a major foothold in Australia, furthering its strategy to build a global presence.

AB InBev said once completed, the divestiture of CUB would help accelerate its expansion into other fast-growing markets in the Asia-Pacific (APAC) region and globally.

AB InBev did not immediately respond to Reuters' request for comment.

AB InBev last week canceled the planned IPO of its Asian business, in which it aimed to raise almost $10 billion, citing market conditions, scrapping what would have been the largest IPO of the year. Some reports suggested investors thought the asking price overvalued.

Anheuser-Busch InBev SA was reportedly considering selling its business units in Australia, Central America and South Korea after it canceled the initial public offering of its Asian business.

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

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.

A week after pulling back from a planned IPO of its Asia-Pacific operations, Anheuser-Busch InBev announced today an $11.3 billion deal to sell its Australian subsidiary, Carlton & United Breweries, to Asahi Group Holdings. AB InBev's net debt totaled $102.5 billion at the end of 2018 and its net debt to core profit ratio was at 4.6 times. AB InBev shares rose as much as 5.6 per cent, the steepest gain in nearly five months. Rothschild & Co. advised Asahi.

AB InBev signaled Friday that it could return with a plan to sell Budweiser Brewing Co.

When acquiring SABMiller in 2016, a deal that gave the Belgian company control over one-third of the world's beer, AB InBev submitted five incremental offers until shareholders finally agreed to a takeover. The pricing of its shelved IPO had applied a multiple of 16-18 times for the Asian business.

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