The Lotte Group has dropped out of the race for Anheuser-Busch InBev's South Korean beer operations, Oriental Brewery, according to local reports.

A report in Yonhap News earlier this week claimed that private equity funds Affinity Equity Partners and Kohlberg Kravis Roberts & Co. have been selected as the final two preferred bidders for the division.

Subsequently, reports out of the country have claimed that Lotte is now looking to create its own beer company. Speaking to The Korea Herald yesterday (17 March), however, a spokesperson for Lotte dismissed the claim.

"The rumour is false and baseless," the spokesperson told the paper. "The company is not even looking into the possibility. It has taken no legal action to pursue such a plan."

When contacted by just-drinks, a spokesperson for A-B InBev declined to divulge further details about the possible divestment of Oriental Brewery. "We are contemplating disposals of certain assets to help re-finance the acquisition of Anheuser-Busch, as previously announced," the spokesperson said. "However, we cannot comment at this stage on which businesses specifically would be considered. Anheuser-Busch InBev's decision will be based on a diligent review of the strategic and financial consequences of any divestment, with the goal of creating the best opportunities and value for all constituents.

"We will not comment on who has approached us for which assets," the spokesperson concluded.

Analysts believe A-B InBev may raise between US$2bn and $2.5bn by selling Oriental Brewery, taking the newly-merged company close to the $3.5bn it needs to raise by November to cover a bridge loan repayment, used to part-finance InBev's $52bn takeover of A-B last autumn.