Eyeing the Asian market, AB InBev brewery buyback for $ 5.8 billion

The drinks giant AB InBev, owner of Ambev, is returning to the Korean market eyeing the expansion potential of beer consumption in Asia. The Group yesterday announced the repurchase of Oriental Brewery for $ 5.8 billion, the company which had been scrapped in 2009, soon after the formation of the conglomerate InBev. The repurchase option was for five years and would win in July.
The decision to return to the business involved both analysis of business management and marketing aspects. According to the own AB InBev, the Oriental Brewery, under the administration of the funds KKR and Affinity, became the largest brewery in South Korea over the last five years. In 2009, the group disbanded the company for $ 1.8 billion. Now, thanks to improved results, the company is being was purchased for $ 5.8 billion. Both accounts include debts.
Analysts say that, thanks to the management of KKR and Affinity, AB InBev will have less work than usual to resume business, which is considered to be efficient in terms of cost. The calculation of the value of the acquisition is about 11 times Ebitda (operating profit) of Oriental Brewery, which was just over $ 500 million in 2013.
In addition to the company be "round", she also represents the biggest gamble of AB InBev in the Asian market so far. The interest has raison d ' être: the region is the main consumer of beer in the world by volume, although the per capita consumption is relatively low.
Second report of the Kirin Institute-bound Japanese giant Kirin Holdings, known in the country as the owner of Schincariol, Asia accounts for 35.1% of world consumption of beer. In 2011, the sale of beer in the region grew by 8.4% over the previous year.
In countries like China, the growth has been especially strong, according to the Institute. The per capita consumption of beer in the country grew by 70% between 2002 and 2011. Even so, a Chinese still consume on average 33.3 litres per year, half of the annual volume.
New horizons. The French Bank Société Générale claims that the return to Oriental Brewery can be an antidote to the more traditional markets slump beer, which are facing difficulties. In Brazil, for example, beer production fell 2% last year, according to data from the internal revenue service.
"The AB InBev looks for areas in which the market grow faster than in regions where the group already is strong," says analyst Andrew Holland, of the Société. "I have doubts about the expansion of sales in the United States and on the potential for growth in Brazil after the World Cup."
With the Oriental Brewery, the flagship brand of beer in South Korea-Cass-will be in the hands of the AB InBev. Second report of the JP Morgan Bank, the business can also be a good platform for their global labels with higher added value, such as Budweiser, which has good acceptance in the country.
The Korean market is considered mature, with overall expansion 1% to 2% per year, but the "premium" brands have grown faster, at a speed of up to 10% per year, says the Bank.