Anheuser-Busch InBev NV shares jumped one of the most since 2015 after people that have knowledge of the situation said by far the largest brewer is considering a preliminary public offering of their Asian operations so as to unlock value from string of acquisitions left it saddled with debt.
The Leuven, Belgium-based maker of Budweiser may be meeting up with potential advisers about the chance for listing its Asian business, in line with the people. Any deal could raise much more than $5 billion, people said, asking not to be defined as the details are private.
The company’s shares rose up to 7.2%, by far the most since September 2015, to 65.63 euros in Brussels trading on news in the potential listing.
AB InBev may attempt to value its entire Asian business about $70 billion from the share sale, although eventual figure depends on market demand and growth prospects to the business, individuals said. Deliberations are in a young stage, and AB InBev could opt against pursuing a transaction, according to the people.
A valuation of $70 billion “looks very excessive to us,” James Edwardes Jones, an analyst at Royal Bank of Canada, wrote in the note.
The world’s largest brewer have been looking to reduce borrowings following its investment in SABMiller for more than $100 billion in 2016. AB InBev shares fell 38% last year, turning it into on the list of worst performers to the Euro Stoxx 50 index of European blue chips.
“We are usually considering chance to optimise our business and drive long-term growth, obviously be more responsive to our strict financial discipline,” an agent for AB InBev said in the statement, declining to investigate specific deals. “We are sold on our businesses during the Asia Pacific region and pumped up about the possibility in such a geography.”
AB InBev hasn’t chosen a subscriber base venue, though Hong Kong is usually a possibility, the people said.
Investors happen to be questioning AB InBev’s strategy after its third-quarter results missed expectations additionally, the company halved its dividend. Asia Pacific contributed $2.3 billion of AB InBev’s revenue while in the quarter ended September 30, accounting for 17% of world sales, depending on data authored by Bloomberg.
Asia has become a key battleground for international brewers as use of mass-market lager slows in The us and Europe. The continent’s prospects dimmed slightly in the third quarter, with Heineken NV in October reporting its weakest Asian beer volume increase in 3 years.
AB InBev will be the largest foreign beer maker in China, by using a 16% business in 2017, according to research firm Euromonitor. It is being focused on selling higher-end brands in the country including Corona and beers manufactured by Boxing Cat, a Shanghai-based craft brewer it acquired 2 yrs ago.
The Asia Pacific beer marketplace is predicted to build to $219 billion by 2022, up from $181 billion in 2017, according to Euromonitor.
AB InBev had 49% share of the market in 2017 in Mexico, where it owns brands like Cass, Euromonitor data show. The company bought South Korean brewer Oriental Brewery Co. in 2014 for $5.8 billion, regaining a small business that it had sold to personal equity many years earlier.