Anheuser-Busch InBev has agreed to sell five of its European beer brands to the Japanese beer and soft drink giant Asahi for a reported 7.3 billion euros ($7.9 billion). The deal includes the sale of Pilsner Urquell (Czech Republic), Dreher (Hungary), Ursus (Romania), and Tyskie and Lech (both Poland). It’s the second transaction between the two companies this year, as Asahi acquired Peroni and Grolsch from AB InBev back in April for $2.9 billion.
WHY IT MATTERS
This is the ripple effect wrought by AB InBev’s $100 billion takeover of SABMiller. For the world’s largest brewer, which now owns roughly 30% of planet earth’s beer market, the deal with Asahi serves to further assuage pesky regulators irked by monopolies and other such hindrances to competition. Indeed, the corporation has been shedding holdings previously owned by SABMiller to keep compliant for a good while now. And both deals with Asahi—the first in April, the second this week—are no different.
But just because the company has been in divesting mode, doesn’t mean it hasn’t been a buyer. Last month, it acquired Karbach in Houston, Texas. Not that these deals have been free of conflict, of course. We know the feds are mighty interested, promising to “carefully scrutinize” AB InBev’s continued craft strategy in the states, having previously investigated its purchase of Devils Backbone. So the company’s continued activity at home—in light of how much it has shed from SABMiller—will certainly be worth following.
As for Asahi, the deal gives the Japanese brewer a stronger foothold in Europe, particularly with Urquell in the Czech Republic, which was identified by the company in a statement as “the world’s highest per capita beer drinking country.” This is particularly important for Asahi, because even though it owned 35.5% of the Japanese market in 2015, the nation’s beer industry overall is shrinking. The company addresses this in a statement, employing words so capitalistically robotic that they become poetic: “Asahi envisages strengthening its cash generating power by positioning its domestic profit base as the cornerstone of its earnings, with the overseas business as its growth engine.”
The AB InBev/SABMiller merger created new regulations in the U.S. for acquisition approvals, seemingly creating a barrier for any one company dominating the market. But those laws may actually open the door for a more speedy entry into American craft for foreign conglomerates like Asahi, should they finally pull the trigger themselves. Maybe there’s something to that overseas growth engine after all.
Japan’s Asahi expands in Europe with AB InBev beer deal [Reuters]