World’s Biggest Beer Brewer Intends to Resume Huge Hong Kong IPO
Budweiser Brewing Co APAC Ltd, the Asia-Pacific subsidiary of Anheuser-Busch InBev (AB InBev), seems to have had a change of heart and now indicates it wants to launch its IPO at the Hong Kong Stock Exchange (HKSE) after canceling this plan in July.
On Thursday, it resumed its application for the listing of a minority stake of its shares on the HKSE. Oddly, Budweiser APAC also said there isn't any guarantee the IPO will go ahead despite resuming its IPO application. It also pointed out "the decision to proceed will depend on a number of factors and prevailing market conditions."
AB InBev, the world's largest brewer, was aiming to sell as much as US$9.8 billion in Budweiser stock in July to seek relief from its heavy debt burden before pulling out of the planned listing. If this IPO had continued, it would have become the world's largest this year. It would have topped that of Uber Technologies Ltd., which raised $8.1 billion in New York on May 10.
AB InBev is calling the IPO a means to push regional consolidation.
This time around, Budweiser APAC plans to raise as much as $5 billion from its forthcoming IPO at the HKSE. It intends to re-launch the float as early as next week.
Sources familiar with the deal said Budweiser APAC is tentatively looking to price the deal on Sept. 23 and list on Sept. 30.
Budweiser APAC's parent firm, Anheuser-Busch InBev, is the world's largest brewer. On the other hand, Budweiser APAC is the largest brewer in Asia by retail sales. It produces and distributes 50 beer brands in China, Australia, South Korea, India, and Vietnam. China is the world's largest beer market.
Analysts said AB InBev will likely use the IPO proceeds to reduce its massive debt load, which stood at more than $100 billion in April. It financed its growth by a series of mergers and acquisitions and piled up debt in the process.
Its most massive acquisition was that of rival SABMiller, which it bought for $102.5 billion in 2018.
AB InBev has taken some steps to deleverage, among which was selling its Australian business for $11.3 billion in July, but its huge debt pile remains practically intact. The loss of the large Australian market means AB InBev's Asia-Pacific operations will concentrate on fast- and high-growth markets such as China, India, and Vietnam.
AB InBev is gambling an Asia IPO might also help boost its revenues from China. Its sales in China grew by 8.3 percent in 2018. Its Budweiser and Corona brands are doing quite well in China.