ABI sells CEE assets to Asahi
Asahi to pony up an EV of 7.5 billion euros
The last major divestment in a lengthy list of divestitures resulting from Anheuser-Busch InBev’s acquisition of SABMiller has been announced this morning.
From a probably limited list of potential suitors, ABI has agreed to sell SABMiller’s Central and Eastern European (CEE) assets to Asahi for an enterprise value of 7.3 billion euros.
The divestiture had been on the cards since ABI’s commitment to the European Commission to sell the CEE business to eliminate potential regulatory obstacles to its bid for SABMiller. To this end, Asahi had previously acquired SABMiller’s Peroni, Grolsch and Meantime assets in Western Europe.
For its money Asahi acquires SABMiller assets in five countries – Poland, the Czech Republic, Slovakia, Hungary and Romania.
These are markets which are amongst the earliest entered into by the then South African Breweries as it began to expand out of its home market in the 1990s. Its initial foray was in Hungary, with its acquisition in 1993 of a majority stake in Koebanyai, with this subsequently merged with Kaniszai to form Dreher. Lastly it acquired the Pilsner Urquell and Radegast in the Czech Republic, in October 1999.
The prize of this acquisition is likely to be considered as the Pilsner Urquell, which was one of SAB Miller’s international brands. As the world’s original lager and a distinctive lingering bitterness and fulsome malty character, it stands out from its international lager brand competitors.
SABMiller’s last-ever year-end figures, to 31st March 2016, suggested difficult market conditions in Poland, where Heineken and Carlsberg units provide strong competition. For the year, net producer revenue (NPR) declined by 9%, off a 5% drop-off in beverage volumes. Adjustments in pricing competitiveness, particularly for lower mainstream brand Zubr, helped boost lager volumes by 6% for the second half of the year.
There were changing market conditions in the Czech Republic, with a shift towards premiumisation. Pilsner Urquell volumes grew by 8%; against this there was an unspecified decline in sales of mainstream brand Gambrinus.
The sale to Asahi is conditional upon EC regulatory approval.