Anheuser Weighs Bid for StarBev 02/22/2012 Wall Street Journal
Beer heavyweights including Anheuser-Busch InBev NV, on the hunt for assets in faster-growing markets, are examining a possible purchase of the owner of Czech lager Staropramen in a deal that could be valued at as much as $3 billion, according to people familiar with the matter.
CVC Capital Partners—which has owned the brewer, called StarBev, since it bought it from Anheuser in December 2009—has received a number of takeover approaches for the business since late last year, the people said. The process is in early stages and might not lead to an imminent sale.
Besides Anheuser, according to the people, global brewers expected to at least take a look at the business include Europe’s SABMiller PLC, Carlsberg A/S and Heineken NV, as well as Molson Coors Brewing Co. of the U.S., Asahi of Japan and possibly other private-equity firms. Anheuser has a “right of first offer” on the business, but it isn’t clear how much of an advantage that gives it, should it decide to ultimately mount an offer for StarBev.
StarBev, as it was renamed by CVC, is the former Central and Eastern European operations of Anheuser. It has operations in nine countries including Bosnia, Bulgaria, Croatia and the Czech Republic, where the business is based. It sells a number of labels that are little known in the West, such as Bergenbier and Borsodi, as well as Staropramen, a global brand available in more than 30 countries. StarBev also has the right to brew or distribute Anheuser brands including Beck’s, Hoegaarden, Lowenbrau and Stella Artois.
Although the business has been hurt by a slowdown in Eastern European economies as a result of the European debt crisis, the long-term growth prospects of developing economies in Eastern Europe are thought to be bright. What’s more, few attractive brewing assets around the world are available for sale and a number of the big global brewers are flush with cash. Anheuser, for example, had $4.5 billion as of last June.
In a similar deal unfolding across the globe, Anheuser and Tsingtao Brewery are among several companies considering bids for the brewery operations of Kingway Brewery Holdings Ltd. of China, people familiar with the matter recently said.
Private-equity firms tend to hold on to companies they buy for three to five years, so a sale at this time of StarBev would represent a fairly quick turnaround and underscore the level of strategic interest in the brewer. While it is unclear exactly how much the company could fetch in a deal, one person said it is likely to be more than CVC paid for it.
The deal Anheuser struck with CVC in 2009 was a complicated one. CVC at that time pegged the enterprise value at $2.23 billion, comprising mainly $1.62 billion in cash and $448 million in a deferred payment obligation. The deal also included a contingent payment of as much as $800 million, though it is unclear how that would fit into any new deal.
Anheuser put the Eastern European business up for sale shortly after AB InBev bought Anheuser-Busch for $52 billion in late 2008, a purchase that saddled the company with $45 billion of debt just as global financial markets buckled in the wake of the collapse of Lehman Brothers. The CVC deal was part of a raft of divestitures that also included Anheuser’s $1.8 billion sale of Oriental Brewery Co. of South Korea to private-equity firm Kohlberg Kravis Roberts & Co. In that case, Anheuser also retained the right to repurchase the company later. It is unclear if and when Anheuser might look to buy back Oriental Brewery.
