Japan’s Asahi Group Holdings said Wednesday it has agreed to acquire some operations from U.K.-based brewer SABMiller in a deal that could smooth the way for a much larger transaction between SABMiller and Belgium-based Anheuser-Busch InBev.
AB InBev, already the world’s largest brewer, has agreed to acquire SABMiller, the world’s second-largest brewer, but both beverage makers realize government trustbusters may not look kindly on one company controlling much of the global beer market. As a result, SABMiller has agreed to unload three brands — Peroni, Grolsch and Meantime — as well as U.K. distribution subsidiary Miller Brands (UK).
The Asahi Group has agreed to pay 2.55 billion euros ($2.89 billion) for the assets.
The deal is subject to AB InBev completing the acquisition of its largest competitor.
“We are pleased to have received this binding offer from Asahi,” said Carlos Brito, chief executive officer of AB InBev.
Peroni is an Italian brand that has been around since 1846. SABMiller in 2003 acquired a majority stake in the brewer from the founding family. The Italian brewer also makes the Nastro Azzurro and Peroni Forte beers.
Grolsch, a more full-bodied beer, has been around since 1615. The Dutch brand has gained a following despite hailing from the same country as Heineken, the world’s third-largest brewer. SABMiller acquired the Dutch brand in 2007.
Attractive to Asahi
The top reason for the sale is to address global antitrust concerns. AB InBev already controls nearly half of the U.S. beer market. In November, a month after AB InBev agreed to buy SABMiller for 71 billion pounds ($104 billion), it decided to sell SABMiller’s stake in MillerCoors, a joint venture between Molson Coors and SABMiller. The sale price was $12 billion.
AB InBev and SABMiller have a combined share of less than 13% in Europe, lower than Heineken’s. Nevertheless, AB InBev/SAB in December showed its intention to sell the four European operations.
The pending sale to Asahi would also help reduce a $75 billion syndicated loan that AB InBev took out in November to help finance the SABMiller acquisition.
AB InBev’s swallowing of SABMiller would leave the beer colossus with more than 400 brands.
As the industry consolidates, brewers are trying to secure dominant positions in their domestic markets while also exporting their brands to emerging countries, where they market their beers as premium brands. However, having hundreds of brands to market creates its own problems.
Now AB InBev is looking to gain market share in Africa, SABMiller’s stronghold, which makes the Peroni and Grolsch brands dispensable. The Italian and Dutch beers, however, remain attractive to Asahi.