Ab InBev adds BAML and Citi ahead of Hong Kong IPO

Ab InBev is likely to file for the IPO with the Hong Kong stock exchange in the first half of 2019.

According to three sources with direct knowledge of the matter at hand, Anheuser-Busch InBev, the world’s largest brewer, has added Bank of America Merrill Lynch and Citigroup to the team of banks working on the sale of its Asia-Pacific business.

Bank of America Merrill Lynch and Citigroup join Morgan Stanley and JPMorgan as lead bankers for Ab-InBev’s planned Hong Kong initial public offering (IPO) which could raise as much as $5 billion for the heavily indebted brewer, said the sources.

Sources preferred the cover of anonymity since they were not authorized to speak to the media.

In 2017-2018, Australia and China accounted for nearly 18% of the group’s volume and 14% of its underlying operating profit, which incidentally rose 13% to $3.1 billion.

As yet, it is not clear how much of the business is up for sale.

AB InBev and BAML did not immediately respond to a request for comment.

Citi declined to comment.

According to sources, The Leuven, Belgium-based maker of Budweiser, Corona and Stella Artois brands aims to spin-off its Asia-Pacific business to reduce leverage.

As of December 2018, AB InBev’s net debt stood at $102.5 billion. The figure is inflated by its late 2016 purchase of nearest rival SABMiller for nearly $100 billion. AB InBev aims to bring down its net debt/EBITDA ratio to around two times from its current position 4.6. Keeping that view, it has halved its proposed dividend and said payouts will only grow slowly.

While AB InBev’s shares have risen by 19% since its report of a forecast-beating earnings in February 2019, it is battling to reverse a longer decline in the price of its shares. Over the last two years, its shares have fallen by 24%. In contrast the share prices of its rivals Heineken and Carlsberg, have gained 15% and 28%, respectively.

If the proposed IPO goes as per plan, it would not be the first time AB InBev has sold Asia-Pacific assets to reduce debt. In 2008, following InBev’s acquisition of Anheuser-Busch, AB InBev sold South Korean unit Oriental Brewery to private equity firm KKR, only to later buy it back in 2014.

Ab-InBev’s Hong Kong IPO is slated for the second half of 2019, said sources.

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Strategy

Tags: , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: