FDBusiness.com

Anheuser-Busch InBev Strengthening its Position in Fast-Growing Asia Pacific Region

 Breaking News
  • Nestlé Inaugurates New Nescafé Dolce Gusto Production in Vietnam Nestlé has inaugurated a new Nescafé Dolce Gusto capsule production line in Dong Nai Province, Vietnam. The site will process an expected 2,500 tons of coffee per year (equivalent to 130 million capsules), using high quality coffee beans from Vietnam. This volume is expected to increase in the coming years. The investment reflects Nestlé’s clear focus on high-growth, [...]...
  • Pink Lemonade Yogurt? Arla Brings Indulgence to New Markets Arla Foods is to expand its successful Finnish brand, Ihana, into new markets with the premium yogurt range being launched in Denmark and the UK. Meaning ‘wonderful’ in Finnish, Ihana was launched through an extensive brand launch in 2016 in Finland with an iconic new design. Indulgence is one of the few areas in growth within [...]...
  • Process Components Announces Kemutec Expansion into Netherlands Process Components has announced the expansion of subsidiary company Kemutec in Europe, with the long-established manufacturing brand opening a new office in the Netherlands. The move forms a key part of its global strategy to extend its global territories, significantly grow its revenues and create new jobs. Kemutec has more than three decades’ worth of heritage in [...]...
  • Packaging Automation Supports the Reduction in Plastic Packaging Waste With the launch of the UK Plastics Pact to address the impact plastic waste is having on the environment, retailers and manufacturers are more conscious of single use and non-recyclable plastics and want to cater for the green consumer. The industry is turning to various kinds of eco-friendly packaging with the aim of reducing plastic [...]...
  • Glanbia Cheese Joint Venture to Build New €130 Million Mozzarella Cheese Facility Glanbia Cheese, the joint venture business between Glanbia plc and Leprino Foods, plans to build a new, world-class mozzarella cheese manufacturing facility in Portlaoise, County Laois, Ireland. A site for the new facility has been identified at the recently established Togher National Industrial Estate in Portlaoise. A total of €130 million will be invested in [...]...

Anheuser-Busch InBev Strengthening its Position in Fast-Growing Asia Pacific Region

Anheuser-Busch InBev Strengthening its Position in Fast-Growing Asia Pacific Region
January 21
12:36 2014

Anheuser-Busch InBev is to reacquire Oriental Brewery, the leading brewer in South Korea, from KKR and Affinity Equity Partners for $5.8 billion. The transaction returns OB to the AB InBev portfolio, after AB InBev sold the company in July 2009, following the combination of InBev and Anheuser-Busch, in support of the company’s deleveraging target.

AB InBev will reacquire OB earlier than July 2014, as it was originally entitled to under the 2009 transaction.

Since KKR and Affinity entered into partnership with OB in 2009, OB has grown to become the largest brewer in South Korea, driven by strong growth of the Cass brand. OB and AB InBev also remained long-term partners through OB’s exclusive license to distribute select AB InBev brands in South Korea such as Budweiser, Corona and Hoegaarden.

Carlos Brito, chief executive of AB InBev, says: “We are excited to invest in South Korea and to be working with the Oriental Brewery team again. OB will strengthen our position in the fast-growing Asia Pacific region and will become a significant contributor to our Asia Pacific Zone. The management team at OB has done a tremendous job of growing the business over the last few years into the leader it is today in South Korea.”

South Korea is an attractive beer market with a strong domestic growth outlook and beer volumes that grew at an annual rate of approximately 2% between 2009 and 2012. During that same period, premium brands grew by approximately 10% per year. South Korea’s beer market is expected to grow by more than 13% in total during the 2012-2022 period.

The enterprise value for the transaction is $5.8 billion, and as a result of an agreement entered into with KKR and Affinity in 2009, AB InBev will receive approximately $320 million in cash at closing from the deal, subject to closing adjustments according to the terms of the transaction. OB estimates its EBITDA in 2013 was approximately KRW529 billion or approximately $500 million at current exchange rates.

AB InBev will draw on existing liquidity to fund the acquisition. The optimal capital structure of the company remains a Net Debt to EBITDA ratio of approximately 2.0x, with previous guidance being the achievement of a ratio below this level during the course of this year. Although this transaction does not represent a material increase in leverage, AB InBev now expects to achieve a ratio below 2.0x after the end of 2014.

The transaction is subject to regulatory approval in South Korea as well as other customary closing conditions, and is expected to close in the first half of 2014.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • September 5, 2018Int'l Food Products and Processing Technologies Exhibition (WorldFood Istanbul)
  • September 15, 2018iba
  • September 25, 2018PPMA Show 2018
  • September 27, 2018Int'l Fruit Show (eurofruit)
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements