AB InBev agrees to sell Australia's Carlton & United Breweries to Asahi

By Rachel Arthur contact

- Last updated on GMT

Pic:getty/runis
Pic:getty/runis

Related tags: Beer, Ab inbev, Asahi

AB InBev will divest Carlton & United Breweries, its Australian subsidiary, to Asahi Group Holdings for $16bn AUD / $11.3bn USD.

Carlton & United Breweries’ portfolio include Foster’s, Victoria Bitter and Carlton, alongside craft brands 4 Pines​ and Pirate Life.​ It also includes AB InBev global brands such as Corona, Leffe and Stella Artois.

Headquartered in Melbourne, Carlton & United Breweries employs nearly 1,600 people across five breweries and various offices around Australia. It joined AB InBev in 2016 as part of AB InBev’s takeover of SABMiller. 

Carlton & United is one of the two big players in Australia's beer industry: alongside Kirin-owned Lion. Alongside Coopers, these three account for nearly 80% of sales volume in the country. 

AB InBev focus on APAC

AB InBev says the divestiture will allow it to accelerate its expansion into other fast-growing markets, both in APAC and worldwide.

Carlos Brito, Chief Executive Officer of AB InBev, said, “We continue to see great potential for our business in APAC and the region remains a growth engine within our company.

“With our unparalleled portfolio of brands, strong commercial plans and talented people, we are uniquely positioned to capture opportunities for growth across the APAC region.”

AB InBev adds that it "continues to believe in the strategic rationale of a potential offering of a minority stake of Budweiser Brewing Company APAC Limited (Budweiser APAC), excluding Australia, provided that it can be completed at the right valuation."

Japanese beer company Asahi will gain the rights to commercialize AB InBev’s global and international brands in Australia as part of the deal.

The transaction, which is subject to customary closing conditions including regulatory approvals in Australia, is expected to close by the first quarter of 2020. The proceeds from the sale will be used to pay down debt. 

Asahi: three core pillars of Japan, Europe and Australia

Asahi has been increasing its global presence over the last few years: with the acquisition of former SABMiller brands Peroni, Grolsch and Meantime​ and SABMiller’s central and European business​ in 2016, both following AB InBev's acquisition of SABMiller. It also acquired Fuller’s beer business​ in the UK earlier this year.

It already has a presence in Australia in soft drinks and beer.

Announcing the acquisition of Carlton & United Breweries, Asahi says its ambition is 'to be a value creator globally and locally, growing with high value-added brands'. It aims to drive growth by promoting premiumization and creating cross-selling initiatives across its core premium brands.

"The Proposed Transaction is aligned with this strategy by adding the leading Australian beer and cider business (including a range of highly attractive brands) to our existing Australian operations creating a stronger, global business platform with three core pillars in Japan, Europe and Australia,"​ it says in a statement.

"CUB has a range of much-loved brands, such as “Carlton” and “Great Northern” which are leaders in Australia, as well as superior marketing and product development capabilities. CUB is highly profitable, leveraging its broad brand portfolio and operational excellence across Australia.

"Australia is an attractive market enjoying sustainable economic growth. Asahi already participates in the Australian beer and cider categories (with global premium brands such as “Asahi Super Dry”, “Peroni” and “Pilsner Urquell”) and the non-alcoholic beverage category having undertaken several soft drinks acquisitions since 2009. Moreover, we expect to acquire the broad distribution network of CUB as well as benefitting from the advantage of greater scale in areas such as procurement by collaborating with Asahi’s existing Australian business which is of comparable size to CUB.

"The acquisition also further enhances Asahi’s management resources by bringing with it a wealth of talented global and local management."

Related topics: AB InBev, Beer, Wine, Spirits, Cider, Beer

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