Asahi buys more SABMiller brands

14 December, 2016 by

By Andy Young

Asahi Group Holdings has confirmed that it has entered into an agreement with AB InBev to buy SABMiller’s Central and Eastern European beer brands.

Advertisement

The deal is worth €7.3bn ($10.36bn) and will include the brands SABMiller owned in the Czech Republic, Slovak Republic, Poland, Hungary and Romania. These brands include Pilsner Urquell, Kozel, Tyskie, Lecher and Dreier.

Having already agreed to buy SABMiller’s other European brands including Peroni, Grolsch and Meantime, this purchase means Asahi has spent over $15bn on buying brands from the AB InBev and SABMiller merger.

That merger has seen a number of brands switching owners as AB InBev sought regulatory approval for the deal in different markets. As well as the brands it has sold to Asahi, AB InBev has also agreed to sell SABMiller's stake in MillerCoors in the US to Molson Coors Brewing, which saw Molson Coors sign a new deal with Coca-Cola Amatil in Australia

The merger also saw the sale of SABMiller’s 49 per cent share in CR Snow, the joint-venture behind Snow Beer, the biggest selling beer in the world.

There was also an $89m deal to support South African farmers and the country’s beer industry. 

In a statement about the deal Asahi said: "Under its newly updated ‘Long-term Vision’, as a comprehensive beverage and food business group with an alcoholic beverages business at its core, Asahi aims, domestically, to be an industry leader focused on sustained corporate value enhancement and, internationally, to establish a distinct position as a global player that leverages its strengths originating in Japan."

"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 company added: "Pilsner Urquell maintains the top market shares in the Czech Republic (the world’s highest per capita beer drinking country), the Slovak Republic, Poland, Hungary and Romania, resulting in significant profitability on the background of its strong business platform.

"Through the acquisition of [these beer brands], together with 'Super Dry', 'Peroni' and 'Grolsch', Asahi aims to establish a unique position as a global player, mainly focusing on a leading premium brand portfolio to achieve sustainable growth.

"Asahi’s strategy is to enhance its cash generating power through its international business by maximizing synergies with its existing business in Europe, the second largest business platform next to its domestic operations, along with merging the brand power and cost competitiveness it has cultivated in Japan."

TheShout has approached Asahi for comment on what this purchase could mean for the Australian market.