Anheuser-Busch InBev exercises option to buy back S. Korean brewer – for $5.8 billion

  • Article by: CHAD BRAY , New York Times
  • Updated: January 20, 2014 - 9:13 PM

Nearly five years after leaving that market in a debt-relief effort, beermaker wants back in.

– Anheuser-Busch InBev said Monday that it will repurchase Oriental Brewery in a deal valued at $5.8 billion nearly five years after it sold the South Korean brewer to private equity firm Kohlberg ­Kravis Roberts.

The deal expands Anheuser-Busch InBev’s international footprint and signals its return to the fast-growing Asia-Pacific region, a market it largely abandoned after the Oriental Brewery sale in July 2009.

The brewery was sold to KKR for $1.8 billion in cash and debt as Anheuser-Busch InBev engaged in a series of asset sales to reduce its debt after a 2008 merger that created the world’s largest beermaker.

Soon after the purchase, KKR sold half of the company to Affinity Equity Partners, a buyout firm specializing in investments in the Asia-Pacific region.

The deal comes just a week after Suntory of Japan agreed to pay $13.6 billion to buy Beam Inc., the maker of Jim Beam and Maker’s Mark whiskeys.

Oriental Brewery “will strengthen our position in the fast-growing Asia-Pacific region and will become a significant contributor to our Asia-Pacific zone,” Carlos Alves Brito, the Anheuser-Busch InBev chief executive, said.

Anheuser-Busch InBev had an option under the terms of the original sale to reacquire Oriental Brewery by July 2014.

The deal is subject to regulatory approval in South Korea and is expected to close in the first half of this year.

Oriental Brewery is the largest South Korean brewer and had an exclusive license to distribute Anheuser-Busch InBev brands, including Budweiser and Corona, in South Korea.

“The success experienced since 2009 is a testament to all the employees of [Oriental Brewery], and we are gratified to have invested in the company and supported the company’s growth as well as their environmental and citizenship initiatives,” Joseph Bae, managing partner of KKR Asia, and Kok Yew Tang, Affinity’s chairman and managing partner, said in a statement.

Beer sales in South Korea are expected to grow by more than 13 percent from 2012 to 2022, the companies said.

Oriental Brewery will continue to be led by its chief executive, In-Soo Chang.

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