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InBev considers sale of S Korean assets

InBev is weighing up whether to sell its South Korean brewery and certain brands in Germany, among other assets, as it works to find the best way to cover a bridge loan that will be provided by lenders to finance its $52bn takeover of Anheuser-Busch.

InBev has secured a $45bn debt package to pay for its purchase of Budweiser brewer Anheuser. The package includes a $7bn loan, which InBev plans to repay by selling certain assets.

InBev has not yet drawn on that loan, and is largely focused on closing the deal and syndicating out its debt, people with knowledge of the matter say.

However, InBev is also reviewing sale prospects for its operations in Korea and Germany, as well as Anheuser's entertainment division, its packaging operations, and its 27 per cent stake in Chinese brewer Tsingtao, these people said.

Of those businesses, the only one InBev has made a concrete decision to sell so far is Anheuser's entertainment unit, which operates SeaWorld, Busch Gardens, and other US theme parks.

A sale of that business could cover roughly half of the $7bn loan, although it may prove tough to secure a high price if the private equity firms and buy-out-owned theme park operators interested in the unit remain hamstrung by the credit crunch.

Based on the size of the other assets on InBev's loosely formed shortlist, the company may eventually have to sell at least three units to satisfy its commitments.

South Korea's Oriental Brewery, which became part of InBev's operations in 1998, has struggled to address declining beer volumes in recent years and ranks a distant second in the market to Hite Brewery.

A sale of Oriental Brewery to a Korean buyer, or to a partnership between Japan's Kirin or Asahi and a Korean buyer, may be one of InBev's better options, according to people close to the matter. InBev may also look to Germany, where it has built a presence since 2001 through acquisitions. Beck's, the top German beer in the world, is a jewel in the company's crown. But the German beer market is mature and declining, and InBev is considering whether to mark certain brands or breweries there for sale.

InBev sees significant value in Anheuser's Harbin Brewery, people close to the company say, but a disposal of Anheuser's coveted minority stake in Tsingtao may be simpler and easier to stomach.

written on 03.09.2008 um 06:27.

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