Anheuser-Busch InBev has finally confirmed that it will sell its South Korean brewing operations to private equity group Kohlberg Kravis Roberts (KKR) & Co.

The global brewer said today (7 May) that it has entered into an agreement to sell off Oriental Brewery (OB) to an affiliate of KKR for US$1.8bn.

KKR will hold the exclusive licenses to distribute certain brands for A-B InBev in South Korea, including Budweiser, Bud-Ice and Hoegaarden. In addition, A-B InBev will hold the right to reacquire OB within five years after closing of the transaction at pre-determined - but unspecified - financial terms.

The divestiture is part of A-B InBev's ongoing de-leveraging programme, introduced to help pay back a $7bn bridge loan taken out to help finance InBev's $52bn acquisition of Anheuser-Busch late last year.

"We are very excited to make our first investment in South Korea and we look forward to contributing to the growth of the economy and to being a long-term, constructive partner in the country," said Joseph Bae, managing partner of KKR Asia. "Through this investment, we hope to bring added-value to OB, the company's employees and the South Korean beer market."

The transaction is expected to close in the third quarter of this year, subject to customary approvals under Korean law.