Anheuser-Busch InBev has announced that they are to buy back Oriental Brewery (OB) five years on from its original sale and six months earlier than the July date that was agreed upon by KKR and Affinity Equity Partners. The acquisition, which is valued at $5.8bn including debt, will see the world’s largest brewer regain a foothold in the Korean beer market, which is currently exhibiting twice the growth rate as the rest of the world.
The acquisition…will see the world’s largest brewer regain a foothold in the Korean beer market, which is currently exhibiting twice the growth rate as the rest of the world
“We are excited to invest in South Korea and to be working with the OB team again. OB will strengthen our position in the fast-growing Asia Pacific region and will become a significant contributor to our Asia Pacific Zone,” said AB InBev’s Chief Executive, Carlos Brito in a press statement. “We expect to be strong contributors to the Korean economy and community, fulfilling our global commitment to establish AB InBev as a leading corporate citizen in the markets in which we operate.”
Although AB InBev are paying over three times the original sale price, the Belgian brewer believes the opportunity in the region to be well worth the price tag. South Korea’s beer market is forecast by Plato Logic Limited to expand more than 13 percent through 2012 to 2022, and has grown at an annual rate of approximately two percent through 2009 to 2012, which represents a considerable opportunity for brewers such as AB InBev.
Over the course of the past five years, OB’s domestic market share has gone from 40 to 60 percent since KKR acquired the company for $1.8bn in mid-2009, at which time InBev was seeking to curtail its debts following a $52bn takeover of Anheuser-Busch.
“The success experienced since 2009 is a testament to all the employees of OB, and we are gratified to have invested in the company and supported the company’s growth as well as their environmental and citizenship initiatives,” said the Chairman and Managing Partner of Affinity, Kok Yew Tang in a statement.
