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Wednesday, September 18, 2019, 16:54
AB InBev to seek up to US$4.85b in Asian unit IPO
By Bloomberg
Wednesday, September 18, 2019, 16:54 By Bloomberg

This photo dated July 17, 2019 shows the AB InBev plant in Leuven, Belgium. (GEERT VANDEN / BLOOMBERG)

Anheuser-Busch InBev NV is set to raise as much as US$4.8 billion, roughly half of an earlier target, with the revived initial public offering of its Asian unit.

About 1.26 billion of Budweiser Brewing Company APAC Ltd shares will be marketed in Hong Kong at HK$27 to HK$30 each, the company said Tuesday. In July, the brewer shelved a share sale that sought to raise as much as US$9.8 billion and agreed to sell its Australian business to Asahi Group Holdings Ltd for US$11.3 billion a week later.

The offering has attracted GIC Pte., a Singaporean sovereign wealth fund, as a cornerstone investor with a commitment of US$1 billion, the company said. The previous attempt didn’t have such a holding.

Hong Kong has a bright future as a financial center

Jan Craps, Budweiser Brewing Chief Executive Officer

ALSO READ: AB InBev said to target US$5b in Asian unit's HK IPO this month

The return of Budweiser Brewing’s IPO is set to boost the Hong Kong bourse just as ongoing anti-government protests there and trade tensions between US and China are rocking the market. It will also propel Hong Kong past Shanghai to become the world’s No 3 in terms of first-time share sale volume.

Besides helping AB InBev pare down its US$100 billion-plus debt pile after its purchase of SABMiller in 2016, the proposed listing may accelerate the beer giant’s goal of creating a local champion in Asia, especially through acquisitions. Budweiser Brewing Chief Executive Officer Jan Craps said the IPO will give the business more flexibility to pursue deals, and that it will focus on areas where it isn’t yet the market leader, in particular southeast Asia.

“Hong Kong has a bright future as a financial center,” Craps said at the press conference. “We are here for the long term.”

Excluding Budweiser Brewing, companies have raised a total of US$10.8 billion through IPOs in Hong Kong this year, according to data compiled by Bloomberg. At US$4.8 billion, the brewer’s listing would be the second-largest globally this year, trailing Uber Technologies Inc’s US$8.1 billion US sale in May.

“If Budweiser can go public successfully, it will have a positive impact on Hong Kong’s capital markets that would demonstrate there’s good appetite for major listings,” said Edward Au, a Hong Kong-based co-leader of national public offering group at Deloitte China. That would also pave an easier path for upcoming smaller share sales, he said.

READ MORE: AB InBev keeps Asia IPO hopes as Asahi buys Australian unit

While AB InBev plans to raise only about about half as much as it sought in July, the Asia unit’s valuation is only marginally lower. Since the original plan was scrapped, the company raised US$11.3 billion from the sale of its Australian business that was part of the Asian unit. Adding that total to the new valuation of as much as US$50.7 billion brings AB InBev close to the US$64 billion it originally targeted.

The minimum dividend payout for the Asia unit will be 25%, Craps said. AB InBev will price shares of Budweiser Brewing on Sept 23, and they will debut on Sept 30, the company said.

JPMorgan Chase & Co and Morgan Stanley are the joint sponsors for the Hong Kong share sale.

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