No Lion hunting as Asahi targets Carlton United

Richmond's Alex Rance at Carlton United Breweries in Abbotsford. Picture: Alex Coppel.

Japanese brewer Asahi is believed to have abandoned its pursuit of the Australia-based Lion Drinks and Dairy division following its $16 billion move on the country’s iconic beer company, Carlton United Breweries, on Friday.

The group is likely to have pushed aside its plans to buy the Kirin-owned Lion, which is worth between $500m and $1bn, after negotiations were reignited with Anheuser Busch InBev over buying its Carlton United business, which includes iconic Australian beer brands such as Victoria Bitter and Carlton.

Anheuser Busch InBev moved to sell the operation after the Belgium-based brewer, the world’s largest, pulled its $US10bn ($14bn) initial public offering of its Asia-Pacific assets on the Hong Kong stock exchange this month due to a lack of demand.

The acquisition will be a return to the business for Asahi, which held a stake in Foster’s during the 1990s, along with BHP.

Melbourne-based CUB was purchased by Foster’s in 2004 and Foster’s was then bought by SAB Miller in 2011 for $11bn.

Then in 2016 SAB Miller was bought by AB InBev.

The latest CUB asset sale will pay for its SAB Miller acquisition.

The sale has proved a major coup for boutiques Lazard and Rothschild, but particularly Rothschild, which advised Asahi and has been a major benefactor in Australia from the firm’s relationship with major global corporations.

The CUB purchase is the largest inbound Australian deal since Unibail Rodamco’s $21bn acquisition of shopping centre landlord Westfield in 2017 — a deal that Rothshild was also involved in.

In 2016, Rothschild also helped Asahi buy Anheuser Busch InBev’s European brands Peroni and Grolsch in a deal worth €2.55bn ($4bn) at the time. Here in Australia, Rothschild had also been working with Asahi on its assessment of Lion.

But other strong ties with global companies have also won Rothschild other work.

It advised the chocolate maker Ferrero when it considered buying Arnott’s Biscuits owner Campbell International this year and it worked with Froneri when it looked at acquiring Tip Top ice cream in New Zealand.

This was before the backer of Froneri, R&R of Britain, turned to Rothschild for advice to buy Peter’s Ice Cream in 2014.

It has also done well out of its relationship with Canadian dairy giant Saputo, which Rothschild advised when it purchased Warrnambool Cheese & Butter in 2014.

The other company it remains close to is the South African retailer Steinhoff International, which has seen its empire almost collapse and is expected to continue selling assets.

Locally, Steinhoff Asia Pacific has been rebranded as Greenlit Brands and the thinking is that the business is planning to sell its general merchandise stores such as Best & Less, Postie Plus and Harris Scarfe while retaining Fantastic Furniture and Freedom Furniture.

Prospective buyers for apparel retailer Best and Less have been sounded out recently, according to sources.

Last year, Harris Scarfe made about $10m profit on $400m of sales, but on an earnings before interest, tax, depreciation and amortisation basis it was understood to lose money.

Best & Less, which has more than 186 stores in Australia, was founded by Bergel Ginges in 1965 and originally named Shenows.

Harris Scarfe collapsed into receivership in 2001 when listed and was owned by various private equity firms before ending up with Steinhoff.