Anheuser-Busch InBev celebrates the New Year by buying back Asia’s biggest brewery

Today has seen the announcement that Anheuser-Busch InBev, one of the world’s leading brewers, is to buy back Oriental Brewery in a deal that gives Oriental an enterprise value of $5.8bn.

For Oriental Brewery, the South Korea-based beer maker, this deal will see the company return to the arms of its former parent, which sold the business back in 2009 to private equity firms Kohlberg Kravis Roberts & Company (KKR) and Affinity Equity Partners.

The original 2009 transaction saw KKR and Affinity acquire the brewer for $1.8bn as a result of Anheuser-Busch InBev’s need to dispose of non-core assets as it attempted to reduce its leverage after the 2008 $52bn acquisition of Anheuser Busch by Inbev.

In the last five years, Oriental Brewery has grown its market share to become the strongest brewer in South Korea and this deal is again evidence that under PE tutelage, a non-core asset can be grown and once again become core to the strategy of its original owner.

The reported price of $5.8bn also proves that very often this comes with a significant price premium!

Filed under: South Korea, drinks, PE, beer