AB-InBev’s Asia unit raises USD 5 billion in Hong Kong IPO

Belgium | Second time lucky? AB-InBev has priced the Initial Public Offering (IPO) of 1,262,350,000 shares of a minority stake of its Asia Pacific subsidiary, Budweiser Brewing Company APAC, at HKD 27 (USD 3.44) per share, media reported on 24 September 2019.

This is at the lower end of the price range, which was indicatively set between HKD 27 and HKD 30 per share. Budweiser Brewing Company APAC, as the new stock market-listed firm is called, will have a market value of USD 45.6 billion.

The current IPO excludes AB-InBev’s Australian operations, which the brewer agreed to sell to Japan’s Asahi for USD 11.3 billion shortly after the previous IPO was cancelled.

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

The expected gross proceeds are about USD 5 billion, prior to any exercise of the over-allotment option. Including this option, AB-InBev could raise about USD 5.75 billion in total.

AB-InBev had to cancel a plan for a bigger IPO of the unit in July that could have raised as much as USD 9.8 billion, citing “several factors, including the prevailing market conditions”.  

The brewer plans to use the proceeds to cut its USD 100 billion plus debt, accumulated following the purchase of rival SABMiller in 2016.

The shares are expected to begin trading on the Hong Kong stock exchange on 30 September. AB-InBev will control a majority (87 percent) of Budweiser APAC.