Budweiser to focus on growing high-end beer market, acquisitions in Asia
- The largest beer company in Asia-Pacific by sales last year is in the process of raising up to US$9.8 billion in a Hong Kong IPO
- Shares to debut on July 9
Budweiser Brewing Company APAC, the Asian business of Belgian beer giant Anheuser-Busch InBev (AB InBev), will focus on growing its premium brands while seeking opportunities to partner with or acquire local brewers, company officials said on Thursday.
Budweiser, the largest beer company in Asia-Pacific by sales last year, is in the process of raising up to US$9.8 billion in a Hong Kong listing, which is set to surpass Uber to become the world’s largest initial public offering this year.
“We want to continue premiumising and offer more choices to consumers,” said Jan Craps, chief executive of Budweiser.
High-end beers represent the fastest-expanding segment in the Asian beer market, according to Budweiser’s prospectus, which cites data from industry consultancy GlobalData.
The region’s premium and super-premium segments showed 11 per cent annual revenue growth over the past five years, compared to 3 per cent annual growth for the overall market. The segments are likely to make up 45 per cent of the overall Asian beer market, rising from the current 38 per cent, according to the prospectus.
Budweiser, which sells 50 brands in Asia, is already the top player by sales in the high-end beer segment in several markets including China and India.
The company sees huge potential in Japan and Southeast Asian markets, such as Vietnam, where they could partner with local brands to increase its influence, Craps said. It was also looking for mergers and acquisitions opportunities.
Budweiser’s net profit jumped 31 per cent to US$1.4 billion in 2018 from a year earlier. Revenue climbed by 8.6 per cent to US$8.5 billion in the same period.
The company did not introduce any cornerstone investors that pledge to subscribe to a certain number of shares, which is common in Hong Kong for companies to boost market confidence.
Sponsors of Budweiser’s listing said the rare move is intended to free up liquidity of the stock and allow more international investors to participate.
“Cornerstone is a very much a Hong Kong, SOE [state-owned enterprise] style of distributing transaction,” said Alex Abagian, head of equity capital markets and syndicate for Asia-Pacific at Morgan Stanley.
“The global institutional community wants liquidity and index inclusion, and these are usually negatively affected by having cornerstone investors.”
The Hong Kong public offering tranche of the listing, accounting for 5 per cent of the total shares, will go on the market between July 8 and 11. The shares will debut on July 19.
