Exclusive: AB InBev seeks to buy Oriental Brewery for $4.5 billion

Fri Jan 17, 2014 1:36pm EST
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By Stephen Aldred, Soyoung Kim and Denny Thomas

HONG KONG/NEW YORK (Reuters) - Anheuser-Busch InBev SA is in advanced discussions to buy South Korea's Oriental Brewery from private equity owners KKR & Co LP and Affinity Equity Partners for more than $4.5 billion, according to people familiar with the matter.

The parties are hammering out final terms of what would be one of Asia's biggest ever private equity transactions with the aim to reach an agreement before the end of January, the people said.

The potential purchase by the world's biggest brewer comes amid upbeat prospects for beer consumption in Asia, with the region's $258 billion market growing twice as fast as the rest of the world.

Discussions on the sale are continuing but they could still fall apart and there is no guarantee a deal will be struck, the people cautioned, asking not to be named because the matter is not public. If final terms are agreed, a deal could come as early as next week, one person added.

AB InBev, KKR and Affinity declined to comment. Oriental Brewery could not be immediately reached for comment.

AB InBev sold Oriental Brewery to KKR for $1.8 billion in 2009. That sale was part of InBev's efforts to raise money to ease the debt burden from its acquisition of U.S. beer maker Anheuser-Busch a year earlier.

KKR later sold half of the equity stake in Oriental Brewery to Affinity.

Under the 2009 deal, AB InBev has the right, but not the obligation, to buy back Oriental Brewery on predetermined financial terms within five years after the closing of the transaction, a period that expires in July this year.   Continued...

View of Anheuser-Busch InBev logo outside the brewery headquarters in Leuven February 27, 2013. REUTERS/Francois Lenoir