, the world's largest brewer, has agreed to buy South Korea's Oriental Brewery from KKR & Co and Affinity Equity Partners for $5.8 billion including debt, regaining ownership of a key Asian asset at a time of strong growth in the industry across the region.
The deal, Asia's biggest ever private equity sale through an acquisition, comes one week after Japan's Suntory Holdings agreed to buy Beam Inc for $13.6 billion, with the transactions underscoring rapid consolidation in the global liquor industry.
Carlsberg, Heineken and SABMiller have also struck deals in Asia over the past five years, lured by the region's $258 billion market that is growing twice as fast as the rest of the world.
Source: Boulevard Brewing Company
Leaven, Belgium-based AB InBev sold Oriental Brewery in 2009 for $1.8 billion to KKR, as part of its efforts to ease the debt burden incurred in the $52 billion acquisition of U.S. beer maker Anheuser-Busch by InBev a year earlier. KKR agreed to pay around $800 million in cash for OB and the rest in debt, later splitting the cash portion with Affinity roughly in half.
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"OB will strengthen our position in the fast-growing Asia Pacific region and will become a significant contributor to our Asia Pacific zone," Carlos Brito, Chief Executive Officer of AB InBev said in a statement.
AB InBev has a relatively small presence in Asia Pacific, with the region accounting for 14.3 percent of the 403 million hectoliters of beer it sold and 2.5 percent of its $15.5 billion in earnings before interest, taxes, depreciation and amortization (EBITDA) in 2012.
KKR and Affinity's sale of Oriental Brewery represents a multiple of over five times the cash they paid, according to a source with knowledge of the matter, a huge return for a deal of this size, rewarding the firms with hundreds of millions of dollars in net profit.
