In what would have been the world’s largest initial public offering in 2019, world’s biggest brewer, Anheuser-busch Inbev, AB Inbev has canceled plans to sell 1.6bn shares of its Asian business to investors, citing “prevailing market conditions”.
The Brewer had hoped to raise almost $10bn from listing its Asia Pacific subsidiary Budweiser Brewing Company APAC in Hong Kong, and helped the giant brewer reduce its debt, while giving it a valuable currency to pursue Mergers & Acquisition in Asia.
“The company is not proceeding with this transaction due to several factors, including the prevailing market conditions, 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 said
The brewer had stated it would use the funds to pare down its huge debt of over Us$100bn racked up primarily from its acquisition of Sabmiller in 2016 and also used part of the proceeds to expand its business in Asia by acquiring regional rivals.
The Belgian Brewer was off to an impressive start this year with a strong Q1 2019 performance accelerating its momentum from the full year 2018 performance. The brewer recorded a 5.9percent growth in revenue buoyed by volume growth of 1.3 percent, with own beer volumes up 1.0 percent and non-beer volumes up 4.9percent, revenue per hl growth of 4.6percent, driven by healthy volume growth, global premiumization, and revenue management initiatives.
The top-line result was driven by healthy performances in several key markets, including Nigeria where it recently introduced Budweiser in the premium segment, others include Brazil, China, the US, Europe, and Colombia.
The Brewer posted revenue of $12.59 billion in Q1 ended 31st March, with combined revenues of its three global brands, Budweiser, Stella Artois and Corona grew by 8.5percent globally and by 14.0percent outside of their respective home markets. Cost of Sales increased by 6.0percent in Q1 and by 4.6% on a per hl basis.
AB Inbev made an inroad into the Nigerian market in 2017 when it acquired 72.17percent of Sabmiller’s shares in International Breweries Plc, in a series of transactions which resulted in AB InBev acquiring controlling interests in the company.
