Japan's Asahi expands in Europe with AB InBev beer deal

Tue Dec 13, 2016 8:56am EST
 
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By Thomas Wilson and Martinne Geller

TOKYO/LONDON (Reuters) - Asahi Group Holdings 2502.T will buy a group of eastern European beer brands from Anheuser-Busch InBev (ABI.BR: Quote) for 7.3 billion euros ($7.8 billion), boosting its new presence in the region in the largest overseas beer deal by a Japanese brewer.

AB InBev agreed to sell brands including Pilsner Urquell from the Czech Republic, Poland's Tyskie and Lech, Hungary's Dreher and Romania's Ursus to ease clearance from competition regulators for its $100 billion takeover of SABMiller, finalised in October.

The acquisition, seen closing in the first half of next year, would be Asahi's biggest deal, building on its 2.55 billion euro purchase of SABMiller's western European brands Peroni and Grolsch.

It was announced on Tuesday morning, less than 24 hours after the deadline for final bids, according to sources close to the matter.

Asahi said on Tuesday that the business had annual earnings before interest, tax, depreciation and amortization (EBITDA) of 493.8 million euros in the year to the end of March.

Based on that figure, its bid represents a multiple of 14.8 times, which is higher than the 12 to 14 times brewing assets in mature markets often fetch.

It paid about 15 times EBITDA for Peroni and Grolsch, its first foray into Europe, fueled in part by synergies with its existing business in Australia.

Asahi was widely seen as the frontrunner in an auction whose first round included bids from a consortium led by Swiss investment firm Jacobs Holding, Czech investment firm PPF, China Resources 0291.HK and private equity firms Bain Capital and Advent International.   Continued...

 
Asahi Super Dry beer cans are displayed at the Asahi Group Holdings headquarters in Tokyo, Japan, May 17, 2016. REUTERS/Toru Hanai/File Photo