AB InBev Said Seeking to Buy Oriental Brewery Back From KKR

Anheuser-Busch InBev NV (ABI), the world’s biggest brewer, is seeking to buy South Korea’s Oriental Brewery Co. Ltd. from KKR & Co. and Affinity Equity Partners Ltd., said two people with knowledge of the matter.

An agreement may be announced as soon as next week, the people said, asking not to be identified as the information is private.

Leuven, Belgium-based AB InBev is seeking to regain a business it sold to KKR in 2009 for $1.8 billion in a bid to cut debt following InBev NV’s $52 billion takeover of Anheuser-Busch Cos. KKR subsequently sold 50 percent of the asset to Affinity. As part of its 2009 agreement AB InBev has the right to buy back the asset at pre-agreed terms this year.

Spokesmen for AB InBev and KKR declined to comment on the potential sale, while officials at Hong Kong-based Affinity couldn’t be reached outside of normal business hours yesterday.

The Korea Times reported Jan. 12 that the original agreement states AB InBev can repurchase Oriental Brewery at 11 times earnings before interest, taxation and amortization, or about $4.15 billion. The transaction could be worth more than $4.5 billion, Reuters said Jan. 17.

Brewers and distillers have been snapping up assets in emerging markets as growth in developed economies stagnates. Carlsberg A/S, (CARLB) the world’s fourth-biggest brewer, last month had a 1.56 billion-yuan ($258 million) offer for eight Chinese breweries accepted by Chongqing Beer Group Co.

Photographer: SeongJoon Cho/Bloomberg

Cases of Oriental Brewery Co. beer, left, are displayed for sale at an E-Mart Co. store, a subsidiary of Shinsegae Co., in Incheon, South Korea. Close

Cases of Oriental Brewery Co. beer, left, are displayed for sale at an E-Mart Co.... Read More

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Photographer: SeongJoon Cho/Bloomberg

Cases of Oriental Brewery Co. beer, left, are displayed for sale at an E-Mart Co. store, a subsidiary of Shinsegae Co., in Incheon, South Korea.

AB InBev, created in the beer world’s biggest merger, sells beers including Bud Light and Stella Artois. It’s grown to be the largest beermaker in the world through a series of acquisitions, including taking control of Mexico’s Grupo Modelo in 2013 for $20.1 billion.

Oriental Breweries sells brands in South Korea including Cass, OB Golden Lager and Cafri, according to KKR’s website.

The deal would be the second takeover of an alcoholic beverage company this year after Japan’s Suntory Holdings Ltd. agreed to buy bourbon maker Beam Inc. for about $16 billion Jan. 13.

To contact the reporters on this story: Clementine Fletcher in London at cfletcher5@bloomberg.net; David Welch in New York at dwelch12@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net; Mohammed Hadi at mhadi1@bloomberg.net

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