The Strategist

Asahi to buy Pilsner Urquell and Kozel for € 7.3 billion

12/13/2016 - 13:56

Japanese brewer Asahi Holdings is going to buy a number of Eastern European beer brands from Anheuser-Busch InBev (AB InBev) Belgian company. Asahi announced this in today’s release. The acquisition price is ¥ 900 billion (€ 7.3 billion). The Japanese company acquires Czech producer of beer Plzensky Prazdroj, Polish Kompania Piwowarska, as well as Romanian Ursus, Slovak Topvar and Hungarian Dreher. Thus, Asahi Holdings will now possess brands such as Pilsner Urquell, Tyskie and Kozel.

Sale of these brands is happening within merger of AB InBev with British SABMiller. Total price of the merger amounted to $ 100 billion. First talks started in 2014, and since then AB InBev made several offers to purchase SABMiller. In October last year, the fifth attempt eventually worked out, and the British company agreed. This summer, boards of directors of both companies have approved the transaction. Terms of the deal imply that the AB and InBev sell a part of their European brands.

As for Asahi, this is its largest cross-border acquisition. The transaction contributes to more active entry of Japanese companies into the international market and makes it fourth largest brewing company in the world. Earlier this year, Asahi acquired several brands of SABMiller - Peroni and Grolsch - for € 2,55 billion. The current acquisition should increase share of Asahi’s overseas sales from 13% to 24%.

After publication of the information in Nikkei newspaper, Asahi’s shares on the Tokyo Stock Exchange fell significantly. As of 5:55 London they fell by 4.8% compared to the previous close of 3.5 thousand yen ($ 30), according to the stock exchange’s data.

"This transaction brings long anticipated relief to InBev’s investors, which share prices have fallen by 15% since the beginning of the year. In October, the brewing company showed profits less than forecast for the sixth quarter in a row. This explains why InBev seeks to acquire SABMiller", - reports Bloomberg.

Anheuser-Busch InBev and SABMiller together control about 30% of the world beer market. Share of Asahi Group Holdings is just a few percent.

Now, Asahi Group Holdings is about to become the first Japanese beer brewer to produce flagship products in Europe. President of the company Akiyoshi Koji said that they would produce a beer brand Super Dry at enterprises in Italy and the Netherlands in 2018.

Last month, Asahi acquired four European beer brands for about $ 2.6 billion in total. The company, in particular, purchased Birra Peroni brand in Italy and Royal Grolsh in the Netherlands.

Company officials expressed their desire to strengthen their brands abroad by doubling sales of the main products in Europe.

The beer market in Japan has been steadily declining, which encourages the company to turn abroad.