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Food & Beverage

AB InBev looks to raise up to $6.6bn from Hong Kong IPO

Singapore sovereign fund GIC commits $1bn to beer company’s revived offering

Budweiser Brewing Company APAC on Tuesday said it could raise up to $4.86 billion in gross proceeds from a relaunched Hong Kong initial public offering.   © Reuters

HONG KONG (Nikkei Markets) -- Budweiser Brewing Company APAC on Tuesday said it could raise up to HK$37.86 billion ($4.86 billion) in gross proceeds from a relaunched Hong Kong initial public offering, months after it pulled the plug on a larger issue, citing weak market conditions among its reasons.

The Asia-Pacific arm of the world’s largest beer maker Anheuser-Busch InBev Group is offering 1.26 billion shares initially in an indicative price range of HK$27 to HK$30 a share. The company has an offer size adjustment option that allows it to issue up to 465 million additional shares, or 36.8% of the initial offer, to cover any additional market demand.

If the offer size adjustment option isn’t exercised, Budweiser Brewing may issue up to 189.4 million additional shares, or 15% of the initial offering at the offer price, the company said. All net proceeds from the offering will be used to immediately repay loans to AB InBev’s subsidiaries, following the transfer of certain companies from the parent company to Budweiser Brewing.

Singaporean sovereign wealth fund GIC Private has committed $1 billion to the company’s offer.

Budweiser Brewing had in July decided to withdraw in the late stages an offering of 1.63 billion shares that it had set in an indicative price range of HK$40.00 to HK$47.00 apiece. At the top end of that range, the company would have then raised HK$76.61 billion in gross proceeds.Investor sentiment in Hong Kong has been heavily influenced in recent months by the Sino-American trade war as well as mass protests that began in June.

Shortly after withdrawing its offer in July, AB InBev agreed to sell its Australian unit Carlton & United Breweries to Japanese brewer Asahi Group Holdings for A$16 billion ($11.30 billion) in enterprise value. Budweiser Brewing’s latest offering excludes the Australian operations.

Budweiser Brewing’s Chief Executive Jan Craps told reporters in Hong Kong on Tuesday that even the latest share offering was conditional upon “right valuation and market conditions.”

“We cannot deny it is a volatile and challenging environment in Hong Kong, but Hong Kong is the best Asian financial center for us to do a listing,” Craps said. A listing in Hong Kong gives the company “a more flexible structure” to make deals happen.

The company has seen “keen interest” from the investor community for the latest offering. Following the sale of the company’s Australian operations, the IPO was now more about “growth,” he added.

J.P. Morgan and Morgan Stanley remain the joint sponsors for the offering.The offer is expected to be priced on Sep. 23, with trading in the shares expected to begin on Hong Kong’s main board on Sep. 30.

-- By Benny Kung

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