Anheuser-Busch, the American brewing company that makes the popular Budweiser and Stella Artois beer brands, is eyeing a listing in Hong Kong with the hopes of raising around $10 billion in new capital. If the company's initial public offering (IPO) in the Hong Kong stock exchange pushes through, it would become the world's biggest IPO this year. It would potentially beat Uber's IPO, which currently holds the record for the year at $8.1 billion.
The Missouri-based company's listing in Hong Kong would be a triumph for the city, which has been trying to attract large global brands to list on its exchanges. Chinese retail giant Alibaba is also reportedly considering another listing on the city's exchange sometime this year.
If Alibaba pushes through with its planned listing in Hong Kong, it would likely beat Anheuser-Busch's IPO to become the largest this year. Alibaba is reportedly setting a target of around $20 billion for its Hong Kong IPO. This would essentially become the biggest IPO in Hong since AIA Insurance raised around $20.5 billion during its debut in 2010.
According to reports citing sources close to the matter, Anheuser-Busch's Asia-Pacific subsidiary, Budweiser Brewing Company APAC will be the one to launch an IPO on the Hong Kong bourse. The company will reportedly be offering around 1.63 million shares that will be priced around HK$40 to HK$47 per piece. At the higher end of the range, the IPO would be able to raise around $9.8 billion in total. That value could, of course, increase significantly if there is enough of a push from investors.
Anheuser-Busch chief financial officer, Felipe Dutra, mentioned in a statement that the funds that would be raised in the IPO will be used to establish a "local champion" for the Asian market. This may hint to the possible establishment of a new brand that will be specifically marketing to Asian countries. Dutra also mentioned that part of the funds will be used to reduce Anheuser-Busch's outstanding debts.
The IPO has been seen by analysts as a shift by Anheuser-Busch into the Asian market as the rest of the world's beet business struggles. Anheuser-Busch has been steadily expanding its Asian reach over the past few years, with the buying of local craft brands to appeal more to the region's younger generation. Last year, Anheuser-Busch reported a decline in its profits of around 14.7 percent to $6.79 billion. However, the forecast for its growth this year remains positive. Analysts' forecast will likely be upgraded once the company pushes through with its planned IPO.
