Japan’s Asahi favorite to buy StarBev from CVC – report

Sources told Reuters that a number of global brewing groups have approached CVC and Asahi has "put a big price on the table." A deal is likely to be agreed in the next two weeks.

CVC acquired what is now known as StarBev in 2009 from Anheuser-Busch InBev, paying $2.2 billion with an additional payment of up to $800 million dependent on the return the PE firm secures on its investment. Although AB InBev has first refusal on any resale, it is not expected to exercise this right. Analysts say the company is more interested in the more lucrative Chinese and Russian markets, as well as the US and Brazil, which account for the bulk of its profits.

Antitrust concerns may dissuade other potential bidders that already have interests in eastern Europe, including SABMiller, Heineken and Carlsberg.

Driven by falling domestic sales, Japan's leading drinks companies have embarked on an overseas M&A drive. This is supported by low borrowing costs and a strong yen, making it very difficult for private equity firms to compete on acquisitions.

In August 2011, Asahi purchased New Zealand beverage company Independent Liquor from Pacific Equity Partners (PEP) and Unitas Capital for NZ$1.525 billion ($1.27 billion). The transaction valued the company at 13x EBITDA, similar to valuations paid by Japanese companies in other deals.

Kirin's A$3.3 billion buyout of Australia's Lion Nathan in 2009 came in at 12.5x EBITDA, preceding its $970 million acquisition of Singapore-based Fraser & Neave a year later, also valued at 12.5x. It took a majority stake in Brazil's Schincariol in August 2011 at 15.7x. In July of last year, Asahi agreed to buy Permanis, Malaysia's second-biggest soft drink maker, for $273 million, which equates to an EBITDA of 15.4x.

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• Topics
• Consumer
• Exits
• Europe
• North Asia
• Japan
• Outbound investment
• M&A
• Exit
• Trade sale
• CVC Capital Partners
• Europe