Japan beermaker mulls bid for SABMiller’s Peroni, Grolsch

Jan 12 2016 06:48
Daryl Loo and Fin24

Singapore – Japan’s largest beermaker Asahi is considering making an offer for SABMiller’s Peroni and Grolsch brands in Europe.

Anheuser-Busch (AB) InBev, which has agreed to buy SABMiller for £68bn (about R1.4trn), wants to sell its world-renowned premium beer brands Peroni and Grolsch.

The news also comes ahead of AB InBev’s listing on the Johannesburg Stock Exchange (JSE) this Friday.

The two brands are among the targets it is considering capital tie-ups, Asahi said in a statement on Tuesday. The brewer of Asahi Super Dry plans to make an offer for Peroni and Grolsch in a transaction that may be valued at as much as 400 billion yen (R57.36), Yomiuri Shimbun reported on Saturday, without citing anyone.

“Asahi could afford a purchase price of around 400 billion yen, but it is still not cheap,” Nomura analyst Satoshi Fujiwara wrote in a report. Mergers and acquisitions fits with the Japanese beermaker’s strategy, and it could use Italy-based Peroni and Dutch brand Grolsch’s sales channels to boost sales of its Super Dry brand, he said.

Nothing has been decided at this time, Asahi said in a statement. The company’s shares fell as much as 2.4% to 3 678 yen in Tokyo trading, the biggest intraday drop in a week. The benchmark Topix dropped as much as 2.1%.

Why SABMiller must sell these brands

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.

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ab inbev  |  sabmiller



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