Beer giant AB InBev seeks US$9.8 billion from Hong Kong listing of Budweiser Asia in world’s largest IPO of the year
- Budweiser Brewing Company APAC, which owns more than 50 beer brands, is selling 1.6 billion primary shares at between HK$40 and HK$47
- 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
Brewing giant Anheuser-Busch InBev NV (AB InBev) is seeking to raise up to US$9.8 billion from a Hong Kong listing of its Asia-Pacific business, marking what would be the world’s largest initial public offering this year.
Budweiser Brewing Company APAC, which includes a portfolio of more than 50 beer brands in the region, is selling 1.6 billion primary shares at between HK$40 and HK$47 (US$5.13-US$6.02) apiece, according to term sheets seen by Reuters.
The deal will raise between US$8.3 billion and US$9.8 billion for heavily-indebted AB InBev before any over-allocation option is included, giving Budweiser Asia a market capitalisation of up to US$63.7 billion after the IPO.
Even at the low end of the price range, the IPO will be the biggest globally this year, outstripping the US$8.1 billion raised in New York by Uber, data from Refinitiv shows.
AB InBev has previously said an IPO of its Asia business could help create a brewing champion for the region, where wealthy consumers are increasingly opting for higher-margin premium beers, such as Budweiser or Corona.
The IPO pricing values Budweiser Asia at 16 to 18 times its enterprise value (EV) to EBITDA (earnings before interest, tax, depreciation and amortisation) ratio, one term sheet shows.
EV-EBITDA is a common valuation metric that seeks to help investors compare companies’ operations and strip out the different effects of financing costs.
Budweiser Asia’s ratio compares with an EV-EBITDA value of 11 for AB InBev itself, according to Refinitiv data, 15 for China-focused Tsingtao and 10 for Japan’s Kirin, another Asia-centric brewing giant.