AB InBev scraps plans for this year’s biggest IPO amid soft demand
Analysts question whether the company was seeking too rich a price for shares
The Asia unit, dubbed Budweiser APAC, includes a fast-growing business in China, as well as a more mature, profitable one in Australia and South Korea.
The world’s largest brewer, Anheuser-Busch InBev, has scrapped the planned float of its Asian business after encountering weak investor appetite for what would have been the biggest initial public offering of the year.
AB InBev had been seeking to sell a minority stake in Budweiser APAC – which markets 50 brands including Budweiser and Stella Artois in China, Australia, South Korea and Vietnam — for up to $9.8 billion (€8.7 billion).
In a statement on Friday ABI said that, “at this time”, it was “not proceeding with this transaction”. It said several factors were to blame, including “prevailing market conditions”.
The deal had been expected to trump ride-hailing company Uber as the biggest IPO of 2019. AB InBev’s troubled IPO follows the decision this week by Swiss Re to pull the £3 billion (€3.34 billion) flotation of ReAssure, its UK life insurance business, blaming weak investor demand. That would have been the biggest IPO in the UK this year.
The listing had been seen as crucial to AB InBev’s effort to repair its balance sheet after an acquisition spree that took its debt up to more than $100 billion. By listing its Asian business, the brewer hoped it could entice investors with the faster growing side of its business and use the listed company as a vehicle to acquire regional rivals.
“You would assume that they have prepared very well for this – it’s a bit of a surprise to see this happening,” said Robert Jan Vos, analyst at ABN Amro.
ABI’s statement added: “The company will closely monitor market conditions, as it continuously evaluates its options to enhance shareholder value, optimise the business and drive long-term growth, subject to strict financial discipline.”
AB InBev had been seeking to list 1.6 billion primary shares in a deal that would have valued the business at between $54.2 billion and $63.7 billion. The co-sponsors for the IPO were JPMorgan Chase and Morgan Stanley. – Copyright The Financial Times Limited 2019