AB InBev agreed to sell brands including Pilsner Urquell from the Czech Republic, Poland’s Tyskie and Lech, Hungary’s Dreher and Romania’s Ursus to ease clearance from competition regulators for its €94.5bn takeover of SABMiller, finalised in October.
The acquisition, seen closing in the first half of next year, would be Asahi’s biggest deal, building on its €2.55bn purchase of SABMiller’s western European brands Peroni and Grolsch.
It was announced yesterday, less than 24 hours after the deadline for final bids, according to sources close to the matter.
Asahi said that the business had annual earnings before interest, tax, depreciation and amortisation of €493.8m in the year to the end of March. Based on that figure, its bid represents a multiple of 14.8 times, which is higher than the 12 to 14 times brewing assets in mature markets often fetch.
It paid about 15 times earnings for Peroni and Grolsch, its first foray into Europe, fuelled in part by synergies with its existing business in Australia.
Asahi was widely seen as the frontrunner in an auction whose first round included bids from a consortium led by Swiss investment firm Jacobs Holding, Czech investment firm PPF, China Resources and private equity firms Bain Capital and Advent International.
Asahi, which needs to offset a weak home market, said the buy would allow it to generate nearly a quarter of sales from overseas, up from 16% in October. Also reaching outside Japan, Sumitomo Corporation agreed last week to buy Fyffes here for €751m in a deal that will merge the largest banana distributors in Asia and Europe.
Asahi’s latest deal will give it 9% of the European beer market excluding Russia, said Bernstein analyst Trevor Stirling, putting it third behind Heineken with 20% and Carlsberg with 12%.
Eastern Europeans already drink a lot of beer. The Czech Republic, where Asahi will be the leader, has the world’s highest per capita consumption, though SAB’s European margins had been eroding for years amid price competition.
“They’ve been very tough (markets) and profits have been declining, not growing,” Mr Stirling said, although the rising popularity of premium and craft beers offers growth markets.