UK Edition
Beer giant AB InBev plans $70bn Asian spin-off
Anheuser-Busch InBev, the world’s biggest brewer, has filed plans to spin off its Asian arm in one of the region's biggest stock market floats in recent years.
An application to list minority stake on the Hong Kong Stock Exchange was made on Friday.
It was reported that the float could raise at least $5bn. Analysts said this would value its Asia-Pacific operations at about $50bn (£38bn). Bloomberg cited sources that said it could be worth up to $70bn, close to Uber's $75bn public debut.
Proceeds will be used to reduce Anheuser-Busch InBev’s unwieldy $103bn debt pile, a legacy of its mega-merger with SABMiller in 2016.
The plans were first mooted on Tuesday as part of the company’s first quarter trading update. “The merits of this initiative are based upon the creation of an '[Asia-Pacific] champion in the consumer goods space. Furthermore, our superior portfolio of brands and leadership position in the beer industry provide an attractive platform for potential M&A in the region,” it said.
JP Morgan and Morgan Stanley will run the initial public offering, about which no further details on the size of stake were provided. Timing would depend on market conditions but the current expectation was to complete it over the summer.
Anheuser-Busch, the US giant behind Budweiser, launched its pursuit of SABMiller in late 2015. After increasing its offer on multiple occasions and clearing regulatory scrutiny, the $100bn deal completed a year later.
The combined company has sought to reduce acquisition financing ever since. It has halved its dividend and warned that future growth of payouts to investors will be slow as it uses cash flow to reduce debt.
Anheuser-Busch InBev recently overhauled its UK and Ireland division, whose brands also include Stella Artois, Corona, Beck’s and Boddingtons.
Budweiser Brewing Group UK&I was launched with the company committing to using British barley and sourcing electricity from UK solar energy providers.