Japanese beverage giant Asahi is believed to be considering buying Australian brewer Carlton & United Breweries from its parent Anheuser-Busch InBev, in a deal that could be worth between $6 billion and $7 billion.
It comes after Anheuser-Busch InBev, the world’s largest brewer, recently shelved plans for the $US$10 billion initial public offering in Hong Kong of its Asian business, which includes the Australian brewer and which also sells brands like Budweiser, Stella Artois, Corona and Hoegaarden.
While discussions between Asahi and Anheuser-Busch InBev regarding CUB have been ongoing, it is understood there is no certainty a deal will eventuate.
CUB, an Australian brewing company based in Melbourne, was purchased by Foster’s Group in 2004.
It is the company behind some of Australia’s best known beers including Victoria Bitter.
Foster’s was purchased by South Africa’s SABMiller in 2011 for $11bn.
In 2016, SABMiller was acquired by Anheuser-Busch InBev.
The Belgium-based drinks giant is believed to be exploring divestments as it tries to drive down debt.
Asahi is understood to have been examining potential acquisitions in the Australian market for some time.
It is understood to have been one of the contenders for the Australian-based Lion Dairy and Drinks business owned by its Japanese rival Kirin Holdings, and a transaction is unlikely to come as any surprise to analysts who have widely tipped Asahi to want to pick up more assets.
Anheuser-Busch InBev is well known to the Japanese brewer after earlier buying the Peroni and Grolsch beer brands in a transaction worth almost $US3bn.
CUB is known to have been on offer for sale since May, when Anheuser-Busch InBev launched an IPO for key segments of its business on the Hong Kong stock exchange.
It comes as Australia’s dominant beer brands struggle with flat growth, while craft and upmarket beers deliver premium returns.
Carlton and United Breweries increased its market share to 48.8 per cent in 2018, from 44.8 per cent in 2013, with rival Lion’s stake in the brewing sector falling from 45.7 per cent to 36.4 per cent, according to reports in The Australian during May.
While value and volume for standard beer has been flat, with growth rates of 1.2 per cent and 0.2 per cent forecast to 2023, premium and super premium beer is tipped to grow by 4.6 per cent in value and 3.3 per cent in volume over the same period.
The shift to premium beer is partly being driven by more health-conscious consumers increasingly watching their alcohol intake and expanding waistlines.
The Australian arm of the Anheuser-Busch InBev business is pouring more investment into these types of beers, citing labels such as Pure Blonde and no-alcohol offering Carlton Zero as examples.
According to the Wall Street Journal, Anheuser-Busch InBev blamed several factors, including the prevailing market conditions, for failing to pull off the IPO of its Asian unit, Budweiser Brewing Co, this month.
However, the WSJ said AB InBev and its banks seemed to have been too aggressive in pricing the IPO, which could have raised up to US$9.8bn.
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