Bids for Peroni and Grolsch due this month

It will be interesting to see how much Peroni and Grolsch will fetch when offers for the two businesses are tabled this month. Indicative offers are due in mid-January, with a tight schedule for due diligence in order to clinch a deal by early March, media say.

In December 2015 AB-InBev said a number of SABMiller’s European premium brands and related businesses – including Peroni, Grolsch and UK-based Meantime – will be offered for sale to help the takeover gain regulatory approval. Any sale may include one or more of these brands or businesses and will be conditional upon closing of the acquisition of SABMiller by AB-InBev.

Media report that Peroni, an Italian lager brand that SABMiller picked up in acquisitions between 2003 and 2005, has more than doubled in value since and may be worth about EUR 938 million, according to analysts at Jyske Bank.

Dutch beer Grolsch has not fared as well. Bought for about EUR 878 million in 2008, the company might now fetch about EUR 268 million, the brokerage said.

Others give the two businesses a much higher valuation, namely north of EUR 1.8 billion (USD 2 billion), based on a combined EBITDA of EUR 120 million to EUR 150 million and a possible multiple of around 12 times EBITDA.

Meantime, a London craft brewer that SABMiller agreed to buy only in May 2015 is also among brands being considered for sale, AB-InBev said.

Already, Molson Coors has agreed to acquire SABMiller’s 58 percent stake in the MillerCoors U.S. joint venture for USD 12 billion.

Due to its strong position in Europe, Heineken has been ruled out as a buyer for Peroni and Grolsch, whereas Carlsberg has ruled itself out. Its Chairman

Flemming Besenbacher was quoted as saying on 4 January 2016 that Carlsberg no longer had an ambition to be the fastest-growing brewer in the world and had no acquisition plans.

The comments built on similar signals from Carlsberg’s CEO Cees ’t Hart. Since joining the brewer in June 2015, he has revamped the brewer’s strategy and cut jobs ahead of a strategic review announcement scheduled for the end of the first quarter. The brewer is under pressure to reduce costs.

Carlsberg said on 5 January 2016 it has agreed to sell its Danish Malting Group (DMG) unit for an undisclosed amount to Viking Malt as it divests assets. DMG has three malting plants (one in Denmark and two in Poland) with a combined annual capacity of 220,000 tonnes and an annual turnover of approximately DKK 700 million (USD 100 million).

So who could buy Peroni and Grolsch? Allegedly, Asahi, Spain’s Mahou-San Miguel and buyout firms such as KKR are among those considering bids. Asahi may be prepared to spend as much as 400 billion yen (USD 3.4 billion) on the two.

Also, Paul Walsh, formerly Diageo’s CEO is rumoured to ponder a return to the beverage industry amid reports he will team with private equity house TPG Capital to consider a GBP 2.0 billion (EUR 2.7 billion) bid for AB-InBev’s European rejects.

Some analysts say that AB-InBev would favour a deal with one of the private equity outfits because it could sell all the brands as a job lot and bypass regulatory issues. Besides, a private-equity sale would give AB-InBev the opportunity to buy back the assets at a later stage. This is what AB-InBev did in Korea, where it sold the Oriental Brewery to KKR in 2009 only to re-acquire it in 2014.