Japan’s Asahi Swallows AB InBev’s Eastern European Beer Brands for $7.8bn

13 Dec 2016 --- Anheuser-Busch InBev is to sell a number of Eastern European beer brands to Japan’s Asahi Group Holdings for €7.3 billion ($7.8bn), as it looks to ease completion concerns over its $100bn takeover of SABMiller. The brands being offloaded by the Budweiser maker are its businesses previously owned by SABMiller in the Czech Republic, Slovak Republic, Poland, Hungary and Romania and include flagship Czech brand Pilsner Urquell, another Czech brand Kozel, and the Hungarian brand Dreier.

Asahi said that the brands it is acquiring from AB InBev, which marks the biggest purchase of foreign beer brands by a Japanese beer company, were “highly compatible with our existing business in Western Europe and will strengthen our business platform, allowing Asahi to grow sustainably across Europe”.

While Asahi is well known in its domestic market, it is now looking to grow globally in the hope of offsetting a slowdown in beer sales in Japan.

Asahi, which controls just over one percent of the global beer market, said that its goal is to establish itself in a “unique position as a global player, mainly focusing on a leading premium brand portfolio”.

As part of is move to grow internationally, Asahi has previously purchased a number of European beer brands including Grolsch and Peroni for €2.55bn ($2.71bn) from SABMiller.

The Japanese brewer said it would now look at possible cost savings across its European businesses.

AB InBev said: “Anheuser-Busch InBev is pleased to announce that it has entered into a binding agreement with Asahi Group Holdings, Ltd. to sell the businesses formerly owned by SABMiller Limited in Poland, the Czech Republic, Slovakia, Hungary and Romania for an agreed enterprise value of €7.3 billion.”

According to Reuters, there was a number of other businesses in contention to buy AB InBev’s brands including a consortium led by Swiss investment firm Jacobs Holding and China Resources.

In September, AB InBev’s takeover of SABMiller, which marks one of biggest takeovers in corporate history, was granted approval from shareholders from both companies.

By hoovering up SABMiller, AB InBev now has an estimated 46 percent of global beer profits, a dominance that has led to some to question whether it is a good thing for the overall beer market.

However, as well as selling brands to Asahi, it has also sold off other businesses to satisfy competition regulators.

In the US, it sold SABMiller’s 58 percent interest in the joint venture MillerCoors LLC to Molson Coors Brewing Co while in China it agreed to sell SABMiller’s Chinese beer business to China Resources Beer Holdings Co. 

Asahi’s shares were down 4.5 percent after news broke about the deal.
 
By John Reynolds