Comment - Asahi Group To Pay Top Dollar For StarBev?
An Asahi Group move for StarBev looks dubious, even if the reports are true.
We know that the Japanese brewers are keen to expand beyond their native shores. Faced with an ageing population that is drinking less beer, they really have no choice.
So far, we've seen a lot of forays into Asia. Asahi has taken 20% of Tsingtao, for instance. Kirin has perhaps been the most active, taking all of Lion Nathan and 48% of San Miguel Brewery. Last year marked something of a watershed for the brewer, when it stepped beyond the Asia Pacific zone to bag Schincariol in Brazil.
So, could Asahi be looking to follow Kirin out of Asia? Some unnamed sources would have it that Asahi is plotting a US$3bn raid on StarBev, the ex-beer assets of Anheuser-Busch InBev in Central & Eastern Europe. StarBev's private equity owner, CVC Capital, is testing the waters for a quick exit only two years after buying the assets.
Interest from elsewhere in the brewing world looks mooted at this point. Could Asahi, then, be home and (super) dry? Well, my understanding of the situation is that we're some way off a deal.
Even if it does happen, though, surely Asahi's investors will be asking questions about the group's strategy? Kirin got badly burned last year for paying a large sum for Schincariol. Granted, Asahi won't face the shareholder disputes that Kirin did with Schincariol. But, $3bn for StarBev looks an expensive deal for largely number two and three positions in beer markets that are, on the whole, no better than when CVC got the business. Asahi won't even have rights on Staropramen in all markets, with A-B InBev holding the rights in Russia, as one example.
I interviewed StarBev's CEO last year and there are good foundations being laid. But, beer sales in many of its core countries remain tough right now.
Added to that, there is caution about Japanese brewers' ability to integrate acquired businesses. In Australia, Kirin is having a difficult time combining Lion Nathan with National Foods, for example. In Eastern Europe, there will be no in-market synergies for Asahi.
If CVC really does want to sell up this soon, might Asahi seek to cherry-pick Staropramen? That could be a more palatable option. If something does happen, it would be one of the stranger brewing deals of recent years.
Following the trajectory in other major markets, Brazil looks ripe for a round of beer consolidation to create a stronger number two behind Anheuser-Busch InBev's AmBev unit. It's an open question, ho...
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