Japanese beverage giant Asahi Group Holdings is reporting planning to take out a loan of 1.19 trillion yen or roughly $11 billion to fund its long-overdue acquisition of Anheuser-Busch InBev's Australian unit. The Tokyo-based company is currently in talks with Japanese lender Sumitomo Mitsui Banking Corporation to secure a substantial loan.
Asahi Group and AB InBev previously reached an agreement in July last year, with the former agreeing to sell its Australian business, Carlton & United Breweries, for $11 billion. The deal was struck after AB InBev temporarily abandoned its plans to list the shares of its Asia-Pacific business, Budweiser Brewing Company APAC, in Hong Kong.
AB InBev eventually proceeding with the initial public offering of its Asia-Pacific business, raising around $5 billion in Hong Kong. The listing was the second-largest IPO in Hong Kong last year, right behind Alibaba Group's $12.9 billion secondary share sale.
During that time, AB InBev, the world's largest brewer, stated that it planned to use the proceeds of the asset sale to pay out some of its debts. At the end of 2019, the company's debt stood at around $95 billion, with a good chunk of the debt incurred through its acquisition of its rival SABMiller in 2017.
Asahi Group mentioned in a statement released on Monday that it has already reached a preliminary agreement with Sumitomo for the loan. The Japanese brewer had agreed to refinance some of its debt and acquire an additional 300 billion yen through equity financing. Asahi mentioned on Monday that it expects the transaction to be completed by June this year.
The acquisition of Carlton & United Breweries is expected to greatly expand Asahi's market share in Australia, where it already sells its Asahi Super Dry lager. Asahi originally planned to complete the transaction during the first quarter of this year. However, delays in acquiring approval from Australian regulators and the disruptions caused by the coronavirus pandemic resulted in the company decided to postpone its plans.
Once the deal is completed, it will be the latest addition to a string of deals between AB InBev and Asahi. AB InBev previously agreed to sell three of its beer brands, including its Grolsch and Peroni brands, to Asahi for $2.9 billion. Asahi acquired AB InBev's Dutch business Grolsch Brewery and its Italian business Peroni Brewery in 2016. Asahi then acquired AB Inbev's Meantime Brewery and Miller Brands UK a few months later.
Asahi further expanded its business in Europe with the additional acquisition of some assets owned by SABMiller from AB InBev. This deal included the sale of local European beer brands such as Lech, Dreher, Ursus, Urquell, Tyskie, and Velkopopovický Kozel.
