CUB Bought By Asahi

July 19, 2019, by Will Ziebell
CUB Bought By Asahi

The world's largest brewing company, AB InBev, have announced they are to sell Australia's CUB to Asahi for $16 billion Australian dollars.

The move, which the company said in a media release would help drive down its own debt, is expected to close early in 2020.

While the media release did not mention what would happen to the likes of craft brands Pirate Life or 4 Pines, as subsidiaries of CUB, they're likely to be passed over to Asahi. The Crafty Pint has approached teams at both Pirate Life and 4 Pines for clarification on the sale and for any comments on the news.

UPDATE: a spokesperson from CUB has confirmed to The Crafty Pint that 4 Pines and Pirate Life are both part of the sale: "4 Pines and Pirate Life are included in the deal. They are coming with us."

The spokesperson also told The Crafty Pint that the online alcohol retailer BoozeBud was part of the sale. AB InBev purchased BoozeBud close to a year ago through its global venture capital arm, ZX Ventures. At the time, ZX's Australia's head said saying the purchase was a "great fit for ZX’s global e-commerce business, where we’ve been successful in partnering with other entrepreneurs in developing their cutting-edge platforms."

Anheuser-Busch InBev merged with its largest competitor, SABMiller, in 2016 to create the AB InBev we know today, with the company buying both Pirate Life and 4 Pines in quick succession in 2017. Following those sales, the former owners of Pirate Life and 4 Pines expressed their excitement at partnering with AB InBev into the future.

The media release also stated Asahi "had the right to commercialize the portfolio of AB InBev’s global and international brands in Australia," so it's possible America's Goose Island will remain under the same banner as Pirate Life and 4 Pines in Australia.

The sale would also see Mountain Goat, which was sold to Asahi in 2015, become stablemates with CUB's local craft division.

The media release added the sale was "subject to customary closing conditions, including but not limited to regulatory approvals in Australia."

The full media release is available below.

Media release

Anheuser-Busch InBev Agrees to Sell Carlton & United Breweries to Asahi Group Holdings, Ltd. and Continues to Evaluate a Potential IPO of Budweiser APAC

Anheuser-Busch InBev (Euronext: ABI) (NYSE: BUD) (MEXBOL: ANB) (JSE: ANH) has agreed to divest Carlton & United Breweries (CUB), its Australian subsidiary, to Asahi Group Holdings, Ltd. for 16.0 billion AUD, equivalent to approximately 11.3 billion USD, in enterprise value. The transaction represents an implied multiple of 14.9x 2018 normalized EBITDA.  As part of this transaction, AB InBev will grant Asahi Group Holdings, Ltd. rights to commercialize the portfolio of AB InBev’s global and international brands in Australia.

The divestiture of CUB, once completed, will help AB InBev to accelerate its expansion into other fast-growing markets in the APAC region and globally. It will also allow the company to create additional shareholder value by optimizing its business at an attractive price while further deleveraging its balance sheet and strengthening its position for growth opportunities.

In addition, AB InBev continues to believe in the strategic rationale of a potential offering of a minority stake of Budweiser Brewing Company APAC Limited (Budweiser APAC), excluding Australia, provided that it can be completed at the right valuation.

Carlos Brito, Chief Executive Officer of AB InBev, said, “We continue to see great potential for our business in APAC and the region remains a growth engine within our company. With our unparalleled portfolio of brands, strong commercial plans and talented people, we are uniquely positioned to capture opportunities for growth across the APAC region.”

Substantially all of the proceeds from the divestiture of the Australian business will be used by the company to pay down debt. AB InBev’s commitment to reach a net debt to EBITDA target ratio of below 4x by the end of 2020 is not dependent on the completion of this transaction.

Asahi Group Holdings, Ltd. has committed financing in place and the transaction is subject to customary closing conditions, including but not limited to regulatory approvals in Australia. The transaction is expected to close by the first quarter of 2020.

This press release does not represent an offer to sell nor a solicitation to buy shares in either AB InBev or Budweiser APAC.

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