20th January, 2014 by Lauren Eads
Anheuser-Busch InBev is set to buy back South Korea’s Oriental Brewery for $5.8bn (£3.5bn) having sold it five years ago.
Belgium-based AB Inbev, the world’s largest brewer, originally sold Oriental Brewery for $1.8bn in July 2009 in an attempt to reduce debts incurred after buying US beer maker Anheuser-Busch in 2008.
As part of the sale AB Inbev, who are responsible for brands including Stella Artois and Bud Light, reserved the right to buy back the brewery after five years.
Today, the brewery confirmed it would be re-purchasing its former partner for £3.5bn from private equity owners KKR and Affinity Equity a bid to strengthen its position in Asia.
The move marks Asia’s largest private equity sale to date.
Carlos Brito, the company’s chief executive, said: “We are excited to invest in South Korea and to be working with the Oriental Brewery team again. OB will strengthen our position in the fast-growing Asia Pacific region and will become a significant contributor to our Asia Pacific Zone. The management team at OB has done a tremendous job of growing the business over the last few years into the leader it is today in South Korea.
“We look forward to working with the OB team to continue to build AB InBev brands in South Korea, provide additional consumer choice and share best practices. In addition, we expect to be strong contributors to the Korean economy and community, fulfilling our global commitment to establish AB InBev as a leading corporate citizen in the markets in which we operate.”
Beer sales in South Korea grew at an annual rate of about 2% between 2009 and 2012 while premium brands grew by about 10% per year in the same period.
South Korea’s beer market is predicted to grow by more than 13% in total during the 2012-2022.
Oriental Brewery will continue to operate from its headquarters in South Korea led by AB Inbev’s Asia Pacific Zone president, Michel Doukeris.
The deal comes just one week after Japan’s Suntory Holdings agreed to buy US beverage group Beam, responsible for brands including Jim Beam, in a deal worth $16bn.