AB InBev Wants Back Into the Bubbling Asian Beer Market
Beer is becoming a big deal in Asia. Chalk it up to whatever you will — the region’s burgeoning economy, globalization, and so on — but Asia’s $258 market is now growing twice as fast as the rest of the world and big brewers are starting to take notice, rightfully so. A BBC article from 2012 noted that the trend has been ongoing for the past few years, reporting that Asia is now the “biggest beer-drinking continent,” as well as the fastest growing beer market, “a sign of a young, upwardly mobile and increasingly hedonistic population,” the British news source said.
It’s no surprise, then, that the world’s biggest brewer, Anheuser Busch Inbev SA (NYSE:BUD), is deep in the midst of talks to buy South Korea’s Oriental Brewery from private equity owners KKR & Co. LP (NYSE:KKR) and Affinity Equity Partners for more than $4.5 billion, sources told Reuters. The deal could come as early as next week, and the aim is to reach a final agreement by the end of January.
Sources who spoke to Reuters caution investors that it’s still possible the entire agreement to fall through, however, and there are no guarantees. The acquisition of Oriental Brewery would be bringing things full circle for InBev, which actually sold the South Korean brewery to KKR in 2009, as part of a strategy to ease the debt burden as a result of InBev’s then recent acquisition of Anheuser-Busch in 2008. KKR then turned around and sold half of their stake in Oriental Brewery to Affinity.