Japan & Australia: Asahi to borrow 1.19 trillion yen to complete purchase of AB InBev’s Australian business
Asahi Group Holdings plans to borrow 1.19 trillion yen (US$11 billion) from Japanese lender Sumitomo Mitsui Banking Corporation to complete its long-brewing purchase of Anheuser-Busch InBev’s Australian business, Reuters reported on May 25.
AB InBev, the world’s largest brewer, agreed to sell its Australian business for A$16 billion (US$11 billion) to Asahi in July last year, after briefly shelving the Hong Kong initial public offering of its Asia-Pacific arm, Budweiser Brewing Company APAC, amid months of anti-government street protests in the city.
The bulk of the proceeds from the sale of the Australian unit, Carlton & United Breweries, is expected to be used to pay down debt. AB InBev’s debt topped US$95 billion at the end of 2019, following its acquisition of rival SABMiller two years earlier.
Budweiser ultimately proceeded with a slimmed down IPO for the Asia unit in September, raising US$5 billion. Several companies delayed or cancelled their IPOs last year, as the street protests intensified and deal valuations declined in the summer. The IPO of AB InBev was a shot in the arm for the Hong Kong stock exchange, after it lost its crown as the top market for IPOs in the first half of the year.
It was the second-biggest listing in Hong Kong last year after Alibaba Group Holding’ US$12.9 billion secondary listing in the city. Alibaba is the parent company of the South China Morning Post.
In a statement on May 25, Japanese brewer Asahi said it had signed an agreement with Sumitomo for the loan and would refinance the borrowing by raising debt and 300 billion yen of “equity credit attributes”.
The deal comes three years after AB InBev agreed to sell the beer brands Grolsch and Peroni, as well as some of the European operations of the former SABMiller, to Asahi for US$2.9 billion. The current deal for AB InBev’s Australian business gives the Japanese brewer a much larger presence Down Under, where it already sells its Asahi Super Dry lager.
Asahi originally planned to complete the acquisition in the first quarter, but announced in March that the deal would be delayed, as the companies were still awaiting approval from Australian authorities amid the coronavirus pandemic, which has forced many countries to close their borders and shut businesses to stem the spread of the virus.
The coronavirus, which causes the disease Covid-19, has infected more than 5 million people worldwide. Australia’s borders remain closed to international visitors, but the country agreed this month to create a travel “bubble” between Australia and New Zealand when it is safe to do so.
The transaction is expected to be completed on June 1, Asahi said on May 25.
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