AB InBev has high hopes for IPO

Anheuser-Busch InBev (AB InBev) has priced the sale of 1.3-billion shares, equivalent to 12%, of its Asian business at HK$27 ($3.44) apiece and expects to raise about $5bn from the initial public offering (IPO).

AB InBev has priced the sale of 1.3-billion shares, equivalent to 12% of its Asian business at HK$27 ($3.44) apiece and expects to raise about $5bn from the initial public offering (IPO).

Known as Budweiser APAC, it is due to start trading on the Hong Kong Stock Exchange on September 30. The offer price is at the low end of the range given by AB InBev in September.

GIC Private, formerly known as the Government of Singapore Investment Corporation, has committed to investing $1bn, which provides a cornerstone investor for the IPO.

The announcement of the details of the IPO comes just two months after the world’s largest beer group pulled an earlier plan for a Hong Kong listing of its Asia-Pacific business.

The $5bn will go some way towards easing the acquisitive beer group’s debt burden, which topped $100bn earlier in 2019. The company has struggled to make significant inroads into the debt used to fund the $107bn acquisition of SABMiller in 2016.

Ina Verstl, a German-based industry analyst, said since that acquisition several things had not gone to plan, particularly in its single most important market, Brazil.

The earlier proposal to sell 1.6-billion Budweiser APAC shares at HK$40-HK$47, which would have raised just under $10bn, was shelved days before trading was scheduled to start.

Within a week of the unexpected decision to pull the July listing, AB InBev announced it was selling Budweiser APAC’s Australian beer assets to Japanese group Asahi for $11.3bn. The sale of the mature and highly cash-generative Australian business means Budweiser APAC is now focused on faster growth markets such as China, India and Vietnam.