Revived Budweiser IPO set to refresh Hong Kong exchange
Beer giant Anheuser-Busch InBev is understood to be reviving the Hong Kong IPO of its Asian unit and is set to raise as much as HK$37.9 billion (€4.4bn), roughly half of an earlier target.
About 1.26 billion of Budweiser Brewing Company APAC shares will be marketed at HK$27-HK$30 each, according to sources. The brewer shelved a share sale in July in which it sought to raise as much as $9.8bn, and agreed to sell its Australian business to Asahi Group for $11.3bn a week later.
The offering has attracted GIC Private — formerly the Government of Singapore Investment Corporation — as a cornerstone investor with a commitment of about $1bn, the sources said. The company didn’t line up any cornerstone investor for its previous share sale.
The return of Budweiser Brewing’s IPO is set to boost the Hong Kong bourse at a time when the city’s ongoing anti-government protests and trade tensions between the US and China are rocking the market.
It will also propel Hong Kong past Shanghai as the world’s number three in terms of first-time share sale volume. Excluding Budweiser Brewing, companies have raised a total of $10.8bn through IPOs in the financial hub this year, according to data compiled by Bloomberg.
At $4.85bn, the brewer’s IPO would be the world’s second-largest this year, trailing Uber’s $8.1bn US sale in May.
“If Budweiser can go public successfully, it will have a positive impact on Hong Kong’s capital markets that would demonstrate there’s good appetite for major listings,” said Edward Au, a Hong Kong-based co-leader of national public offering group at Deloitte China. That will pave an easier path for upcoming smaller share sales, he said.
The removal of AB InBev’s Australian unit, in hiving off a slower-growing part of its Asia-Pacific empire, potentially makes the latest IPO plan more attractive to investors who balked at the previous deal’s valuation.
Without Australia, the Asian unit’s revenue in 2018 was $6.7bn, representing organic growth of 7.4%, said the company in its latest preliminary prospectus. In the earlier filing, the Asian unit — including Australia — had revenue of $8.5bn, representing organic growth of 6.1%.
Besides helping AB InBev pare down its $100bn-plus debt pile after its mega-purchase of SABMiller in 2016, the proposed listing will also accelerate the beer giant’s goal of creating a local champion in Asia, especially through acquisitions. “We also expect that there is an M&A motive for pushing the IPO fast,” said Euan McLeish, a Hong Kong-based consumer analyst at Sanford C. Bernstein.
San Miguel in the Philippines or Vietnam’s Sabeco Brewery could be among potential targets that can “materially” enhance AB InBev’s growth trajectory in the region, he added.
“These assets are unlikely to be sold for cash, but selling control in return for a stake in an attractive publicly-listed equity in Asia could be a compelling prospect for the owners.”
Budweiser Brewing is expected to price the offering on September 23 and to debut on September 30. Representatives for AB InBev and GIC declined to comment. JPMorgan Chase & Co and Morgan Stanley are the joint sponsors for the Hong Kong share sale.
