Asahi to buy SABMiller’s as­sets

China Daily (Hong Kong) - - BUSINESS - By BLOOMBERG

Asahi Group Hold­ings Ltd agreed to buy SABMiller Plc’s east­ern Euro­pean as­sets in­clud­ing Pil­sner Urquell from An­heuser-Busch InBev NV for 7.3 bil­lion euros ($7.8 bil­lion), as the Bud­weiser maker ties up loose ends after com­bin­ing the world’s two big­gest brew­ers.

Asahi ex­pects the ac­qui­si­tion to close in the first half of 2017, and is po­si­tion­ing its over­seas busi­ness as a growth en­gine to es­tab­lish it­self as a global player, the Tokyo-based brewer said on Tues­day.

The deal fur­ther strength­ens Asahi’s foothold in Europe after Ja­pan’s largest brewer agreed to pay 2.55 bil­lion euros for AB InBev’s Peroni and Grolsch brands ear­lier this year. For AB InBev, the di­vest­ment brings it a step closer to meet­ing the an­titrust com­mit­ments that al­lowed it to buy SABMiller for about $100 bil­lion.

“We had es­ti­mated a value be­tween $5 bil­lion and $6 bil­lion, so the price paid by Asahi looks pretty full and great for AB InBev,” Trevor Stir­ling of San­ford C. Bern­stein said. The an­a­lyst es­ti­mates the mar­ket share by beer vol­ume that Asahi will now have in Europe, ex­clud­ing Rus­sia, is about 9 per­cent.

bil­lion

Asahi shares fell 4.6 per­cent by the close of Tokyo trad­ing on Tues­day, the big­gest drop since June. The pur­chase would be the largest by a Ja­panese brewer since Kirin Hold­ings Co’s A$4.8 bil­lion ($3.6 bil­lion) ac­qui­si­tion of Aus­tralia’s Lion Nathan Pty in 2009, ac­cord­ing to data com­piled by Bloomberg.

A com­pleted sale would bring some much-needed cheer for AB InBev in­vestors, who have seen the stock slide 15 per­cent this year through Mon­day.

In Oc­to­ber, the brewer missed profit es­ti­mates for the sixth straight quar­ter, il­lus­trat­ing why it needed to ac­quire SABMiller.

The $21 bil­lion Ja­panese beer mar­ket is stag­nat­ing, with lit­tle growth pro­jected through 2019, ac­cord­ing to data tracker Euromon­i­tor. Over the same pe­riod, the global mar­ket for beer should ex­pand by 8.2 per­cent.

Asahi and other Ja­pan brew­ers have been chas­ing over­seas ac­qui­si­tions to re­duce their de­pen­dence on a do­mes­tic mar­ket ham­pered by a shrink­ing pop­u­la­tion.

Buy­ing the ad­di­tional SABMiller brands will also help Asahi at­tract younger Ja­panese drinkers with es­tab­lished pre­mium beers, said Haitong In­ter­na­tional se­cu­ri­ties an­a­lyst Ni­co­las Wang.

the amount Asahi will pay for SABMiller’s East­ern Euro­pean as­sets

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