Anheuser-Busch seeks $9.8 billion in 2019’s largest IPO
Brewing giant Anheuser-Busch InBev NV is seeking to raise up to $9.8 billion by listing its Asia-Pacific business in Hong Kong, marking what would be the world’s largest initial public offering this year.
Budweiser Brewing Company APAC, whose portfolio of more than 50 beer brands includes Stella Artois and Corona, is selling 1.6 billion primary shares at between HK$40 and $47 ($5.13 and $6.02) apiece, according to term sheets seen by Reuters.
The deal will raise between $8.3 billion and $9.8 billion for heavily indebted AB InBev before any over-allocation option is included, giving Budweiser Asia a market capitalization of up to $63.7 billion after the IPO.
The world’s largest brewer has been working to reduce a debt pile of over $100 billion following the purchase of rival SABMiller in late 2016.
The company has said the main merit of a Hong Kong listing would be to create a champion in the Asia-Pacific region, where sales are still growing and increasingly wealthy consumers are trading up to higher-margin premium beers.
“In addition to paying down debt, the deal provides AB InBev with a ‘platform for M&A’ whereby local brewers such as ThaiBev might prefer to tie up with a locally focused player in an Asian currency,” said Nico von Stackelberg of Liberum.
Shares in Belgium-based AB InBev traded 1.4% higher at 79.36 euros by 0925 GMT.
Even at the low end of the price range, the IPO will be the biggest globally this year, outstripping the $8.1 billion raised in New York by Uber, data from Refinitiv shows.
Global share listings hit their lowest level in three years in the first half of the year, with a slowdown in Europe counteracting a stronger US showing.
The deal will be a welcome boost to Hong Kong, which is lagging behind the New York Stock Exchange and Nasdaq in terms of IPOs this year, with $8.9 billion to its credit compared with $14.9 billion and $17.5 billion raised by its US rivals.
The biggest listing in the Asian financial hub so far in 2019 has been that of Chinese securities firm Shenwan Hongyuan HK, which raised $1.2 billion in April.
The investor response to the offering will also act as a barometer for other large share sales in the near future, with Alibaba Group Holding Ltd. considering raising as much as $20 billion through a listing in Hong Kong.
Budweiser Asia’s deal is expected to price in New York on July 11 and the stock will debut in Hong Kong on July 19, the term sheet showed.
A spokeswoman for AB InBev declined to comment.