Budweiser Brewing Company APAC (1876.HK)

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#1
AB InBev seeks $9.8 bln for Asia stake in world's largest 2019 IPO

Sumeet Chatterjee, Alun John
JULY 2, 2019 / 11:51 AM

HONG KONG (Reuters) - Brewing giant Anheuser-Busch InBev NV (AB InBev) (ABI.BR) is seeking to raise up to $9.8 billion by listing its Asia-Pacific business in Hong Kong, marking what would be the world’s largest initial public offering this year.

Budweiser Brewing Company APAC, whose portfolio of more than 50 beer brands includes Stella Artois and Corona, is selling 1.6 billion primary shares at between HK$40-$47 ($5.13-$6.02) apiece, according to termsheets seen by Reuters.

The deal will raise between $8.3 billion and $9.8 billion for heavily-indebted AB InBev before any over-allocation option is included, giving Budweiser Asia a market capitalization of up to $63.7 billion after the IPO.

The world’s largest brewer has been working to reduce a debt pile of over $100 billion following the purchase of rival SABMiller in late 2016.

The company has said the main merit of a Hong Kong listing would be to create a champion in the Asia-Pacific region, where sales are still growing and increasingly wealthy consumers are trading up to higher margin premium beers.

“In addition to paying down debt, the deal provides AB InBev with a ‘platform for M&A’ whereby local brewers such as ThaiBev might prefer to tie up with a locally focused player in an Asian currency,” said Nico von Stackelberg of Liberum.

Shares in Belgium-based AB InBev traded 1.4% higher at 79.36 euros by 0925 GMT.

WORLD’S BIGGEST

Even at the low end of the price range, the IPO will be the biggest globally this year, outstripping the $8.1 billion raised in New York by Uber (UBER.N), data from Refinitiv shows.

Global share listings hit their lowest level in three years in the first half of the year, with a slowdown in Europe counteracting a stronger U.S. showing.

The IPO pricing values Budweiser Asia at 16-18 times its enterprise value (EV) to EBITDA (earnings before interest, tax, depreciation and amortization) ratio, one termsheet shows.

EV-EBITDA is a common valuation metric that seeks to help investors compare companies’ operations and strip out the different effects of financing costs.

Budweiser Asia’s ratio compares with an EV-EBITDA value of 11 for AB InBev itself, according to Refinitiv data, 15 for China-focused Tsingtao (0168.HK) and 10 for Japan’s Kirin (2503.T), another Asia-centric brewing giant.

The deal will be a welcome boost to Hong Kong, which is lagging behind the New York Stock Exchange and Nasdaq in terms of IPOs this year, with $8.9 billion to its credit compared with $14.9 billion and $17.5 billion raised by its U.S. rivals.

The biggest listing in the Asian financial hub so far in 2019 has been that of Chinese securities firm Shenwan Hongyuan HK Ltd (0218.HK) which raised $1.2 billion in April.

More details in https://www.reuters.com/article/us-ab-in...SKCN1TX0EL
Specuvestor: Asset - Business - Structure.
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#2
AB InBev Asia unit raises $5 billion in revived Hong Kong IPO under shadow of protests

Julie Zhu
SEPTEMBER 24, 2019 / 8:10 AM

HONG KONG (Reuters) - Brewer AB InBev priced the Hong Kong IPO of its Asia-Pacific unit at the bottom of a marketed range to raise about $5 billion, indicating deals in the pipeline may need subdued valuations to succeed as protests in the city unnerve investors.

Anheuser-Busch InBev NV (AB InBev), the world’s largest brewer, relaunched the initial public offering (IPO) this month after cancelling a plan for a bigger IPO of the unit in July citing “several factors, including the prevailing market conditions”.

Separately, Topsports International Holdings, the sportswear business of Chinese footwear retailer Belle International, launched on Tuesday a Hong Kong IPO of up to $1.2 billion, as per a marketing term sheet seen by Reuters.

The AB InBev and Topsports offerings are among a handful of recent sizeable IPOs seen as tests of investor sentiment following anti-government protests that have roiled Hong Kong for nearly four months and weighed on its stock market.

Markets more generally are also on edge amid a trade dispute between the United States and China, as well as slowing global growth.

The IPO of Budweiser Brewing Company APAC Ltd is still the second-biggest globally so far this year, trailing only the $8.1 billion flotation of Uber Technologies Inc in May, data from Refinitiv showed.

AB InBev, whose portfolio of more than 50 beer brands includes Stella Artois and Corona, said on Tuesday the Budweiser IPO was priced at HK$27 ($3.44) per share, the bottom end of the HK$27 to HK$30 indicative range, confirming what sources had earlier told Reuters.

AB InBev’s revived IPO excludes its Australian operations, which it agreed to sell to Japan’s Asahi Group for $11 billion shortly after the previous IPO was shelved.

Without Australia, a large but mature market, AB InBev’s Asia-Pacific operations would be more focused on faster growth markets such as China, India and Vietnam, which has made the IPO an easier sell, sources have said.

“The company has top-notch assets and without the slow-growing Australian operations the deal has become more attractive than last time,” said one source with knowledge of the Budweiser IPO.

“And today’s low end pricing would give the stock more upside potential in the public market.”

BOOST FOR HONG KONG?

The IPO pricing comes as Hong Kong leader Carrie Lam said on Tuesday that she hoped peaceful and rational dialogue will help find a way out of the protests gripping the former British colony.

At HK$27 per share, Budweiser will have a market value of $45.6 billion, and a forward enterprise value (EV) to expected EBITDA - earnings before interest, tax, depreciation and amortization - valuation of 17 times, according to sources with knowledge of the matter. By comparison, the aborted July float was aiming for a forward EV/EBITDA of up to 18.2 times.

The new valuation is cheaper than the 23.5 times forward EV/EBITDA that its rival China Resources Beer Holdings commands.

Budweiser said last week it had lined up Singapore sovereign wealth fund GIC to invest $1 billion in the IPO as its cornerstone investor, lending some stability to the IPO. It did not have a cornerstone investor during the July float attempt.

More details in https://www.reuters.com/article/us-hongk...SKBN1W9045
Specuvestor: Asset - Business - Structure.
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