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Brewer bids R45.35bn for SABMiller’s Peroni and Grolsch

Tokyo - Asahi has offered to buy SABMiller’s Peroni and Grolsch beer brands for €2.55bn (R45.35bn) in the Japanese brewer’s biggest-ever acquisition as it seeks to grow sales outside a stagnating domestic market.

Anheuser-Busch (AB) InBev has entered exclusive talks with Asahi to sell the SABMiller [JSE:SAB] businesses in Italy, the Netherlands and the UK-related to those brands, plus British craft brewer Meantime, Asahi said in a statement on Wednesday.

The purchase would be the largest involving a Japanese-listed beermaker since Kirin’s R39.58bn acquisition of Australia’s Lion Nathan in 2009, according to data compiled by Bloomberg.

The deal would give Asahi a foothold in the European market where it currently has no exposure, joining other companies in the North Asian country seeking foreign acquisitions to reduce their dependence on a domestic market that’s been hampered by a shrinking population.

Asahi’s incoming President Akiyoshi Koji said on Tuesday that his ambition is to make the company a global player and expand it beyond Asia.

Why AB InBev wants to sell brands

AB InBev, which has agreed to buy SABMiller for £68bn (about R1.56trn), wants to sell its world-renowned premium beer brands Peroni and Grolsch.

The sale would only take place if the AB InBev acquisition of SABMiller takes place. It would also be subject to appropriate engagement with stakeholders, unions and works councils.

"Under SABMiller's stewardship, Peroni and Grolsch have become world-renowned premium beer brands,” said Alan Clark, chief executive of SABMiller.

Dutch Grolsch beer was founded in 1615, while Italy’s Peroni has been produced since 1846, according to SABMiller’s website.

“Until the change of control we will continue to invest in growing these great beers and supporting our talented people who brew, sell and manage them."

The combined company will have the number one or two positions in 24 of the world’s 30 biggest beer markets, and provide AB InBev its first toehold in Africa, where about 65 million people are due to reach the legal drinking age by 2023.

SABMiller agreed to sell its 58% stake in MillerCoors to partner Molson Coors Brewing in a R173bn deal earlier this month to win regulators’ approval.

The deal to merge SABMiller and AB InBev, called “Megabrew” by analysts, will create a behemoth controlling about half of the industry’s profits.

Beer slump

The potential Peroni and Grolsch deal comes as beer drinking declined in Japan since 2001, with more people turning to alternatives such as whisky and wine even as the population shrinks.

Tokyo-based Asahi’s beer unit is targeting to sell 161.5 million cases of beer and beer-like drinks in 2016, a 0.4% rise from last year, it announced January 6.

Brewers including Asahi and buyout firms such as KKR & Co. are among those considering bids for the two European beer brands, people familiar with the matter had said in December.

Selling SABMiller’s assets would smooth the way for AB InBev NV to take over the brewer by helping to clear antitrust hurdles in Europe.

Asahi, which also sells spirits and non-alcoholic beverages, is also considering buying US soft drinks company Talking Rain for about 50 billion yen, the Nikkei newspaper reported last month.

AB inBev JSE listing

AB inBev [JSE:ANB] listed on the Johannesburg Stock Exchange's main board in January, with an opening price of R1938 a share.

The R3trn listing comes after AB InBev's accepted takeover bid of brewer SABMiller. As part of the planned acquisition, AB InBev pledged to list the combined entity in South Africa.

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