AB InBev accepts 2.55-bn Asahi offer for premium beer brands

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19 April 2016

Anheuser-Busch InBev NV has accepted Asahi Group Holdings Ltd's offer to buy the Peroni, Grolsch and Meantime beer brands for 2.55 billion ($2.9 billion), clearing another hurdle in the European brewer's efforts to win regulatory approval for the purchase of SABMiller Plc.

The purchase by Asahi, which covers the premium brands and their related businesses in Italy, the Netherlands, the UK and internationally, is conditional on the SABMiller deal going through, AB InBev said in a statement today. The companies announced on 10 February that Asahi had made a binding offer.

The acquisition would be Asahi's biggest, giving the brewer a foothold in Europe where it currently has no presence while reducing its dependence on a domestic market hampered by a shrinking population.

''Both Peroni and Grolsch are excellent brands with good market share in Italy, Holland and the UK,'' said Bloomberg Intelligence analyst Duncan Fox. ''This should allow Asahi to distribute its brands through those networks, and I assume they will take the European brands into the home market too, at a premium no doubt.''

AB InBev rose as much as 2.4 per cent to 115.10 euros in Brussels, while Asahi gained 2 per cent to 3,556 by the close of trading in Tokyo today.

As beer sales in Japan stagnate, Asahi is looking to Southeast Asia and Australia for growth and can use the newly-acquired premium European brands for leverage as consumers in these territories upgrade to higher-quality brews, said Tokyo-based analyst Masashi Mori of Credit Suisse AG.

How Asahi will fare managing the brands' existing business in Europe is less clear, said Mori, given cultural differences. ''They have good experience in cost control in past acquisitions, but whether they can manage it from the European brand perspective, I'm still dubious,'' he said.

Asahi will need to invest in Europe's competitive beer sector to maintain market share for its new brands, as Grolsch faces Heineken on its home turf in the Netherlands while Peroni competes with other strong brands in both Italy and the U.K., said Bloomberg Intelligence's Fox.

AB InBev's $108 billion takeover of SABMiller faces antitrust hurdles around the globe.

Last week, the maker of Budweiser agreed to protect South African jobs and create a $69-million fund to support the local beer industry to help seal approval there. It's also sold SAB's 49 per cent stake in China's top brewer Snow beer to local partner China Resources Beer (Holdings) Co for $1.6 billion to satisfy regulators.





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