Anheuser-Busch InBev will reacquire Oriental

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Anheuser-Busch InBev will reacquire Oriental

Anheuser-Busch InBev NV, the world’s biggest beermaker, agreed to pay $5.8 billion to buy back Korea’s Oriental Brewery from KKR & Co. and Affinity Equity Partners.

AB InBev will fund the acquisition using internal resources, according to a statement from the companies distributed on PR Newswire. AB InBev will receive about $320 million in cash when the transaction is completed.

Leuven, Belgium-based AB InBev will regain a business it sold to KKR in 2009 for $1.8 billion in a bid to cut debt following InBev NV’s $52 billion takeover of Anheuser-Busch. KKR subsequently sold 50 percent of the asset to Affinity. Oriental Brewery has become Korea’s largest beermaker on the growth of its Cass brand, the statement said.

The deal values Oriental Brewery at about 11.6 times earnings before interest, taxes, depreciation and amortization, compared with the average of 10.1 times for 24 global brewery acquisitions over the past five years, according to data.

Announced acquisitions in the brewery industry were worth about $22 billion in 2011 and $32 billion in 2012 before declining to $5.5 billion last year. AB InBev’s purchase would be the second takeover of an alcoholic beverage company this year after Japan’s Suntory Holdings agreed to buy bourbon maker Beam for about $16 billion Jan. 13.

AB InBev’s right to buy back Oriental Brewery at pre-agreed terms this year was part of the 2009 agreement with KKR. The deal has an enterprise value of $5.8 billion and is expected to close in the first half of the year, according to the statement. It’s subject to regulatory approval in Korea.

AB InBev, created in the brewery world’s biggest merger, sells brands including Bud Light and Stella Artois. It’s grown to be the largest beermaker through a series of acquisitions, including taking control of Mexico’s Grupo Modelo for $20.1 billion, a deal that was announced in 2012 and completed last year.

Oriental Brewery sells brands in Korea including Cass, OB Golden Lager and Cafri, according to KKR’s website. It also remained a partner with AB InBev and distributes Budweiser, Corona and Hoegaarden. Bloomberg
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