CVC Capital Partners want AB-InBev’s central and eastern European breweries
According to widely copied news agency reports, people close to the action said at the end of July that CVC, a London-based leveraged buyout firm, offered USD 2.1 billion for AB-InBev’s central and eastern (sic) European assets.
This makes more sense to us – someone willing to buy the bread crumbs and the juicy meaty bits.
After all, AB-InBev’s central European markets represent only a small fraction (15 million hl) of AB-InBev’s total beer sales across the area, which were 46.1 million hl in 2008, down from 49.1 million hl in 2007.
Due to the current economic crisis, AB-InBev saw volumes drop in the region 6.1 percent in 2008.
In Russia in 2008, AB-InBev’s beer sales fell 12.4 percent to 18.6 million hl while they remained stable in the Ukraine at 10.8 million hl.
When it comes to market share, AB-InBev are the number one in the Ukraine and number two in Russia (so they say), while they hold either number one or number two positions in Bulgaria, Croatia, the Czech Republic, Serbia and Montenegro.
In both Romania (their major central European market at 4.0 million hl) and Hungary they hold number three positions.
As said, it seemed highly unlikely to us that in the current economic crisis someone would come along and buy AB-InBev’s central European assets only.
Eventually, Russia and the Ukraine will rise from the ashes again and that’s where you will want to be then.
However, if CVC Capital Partners are really interested in acquiring all of AB-InBev’s operations across the region, the price they are offering is a joke: USD 2.1 billion, it was rumoured.
If AB-InBev agree to that they must be more desperate than we thought.
Let’s remind ourselves that AB-InBev got USD 1.8 million for their South Korean Oriental Brewery (7.4 million hl) when they sold it to private equity company Kohlberg Kravis Roberts & Co in May this year.
Another rumour, which was widely reported, said that TPG Inc., a private equity firm, dropped a plan to bid for AB-InBev’s breweries.
Apparently, AB-InBev have had to extend the deadline to attract further bids.
