AB InBev To Reacquire Oriental Brewery For $5.8 Bln - Quick Facts

(RTTNews) - Belgian brewer Anheuser-Busch InBev, known as AB InBev (BUD, AHBIF.PK), KKR & Co. L.P. (KKR) and Affinity Equity Partners said that an agreement has been reached, under which AB InBev would reacquire South Korean brewer Oriental Brewery or "OB" from KKR and Affinity for $5.8 billion.

As a result of this agreement, AB InBev would receive nearly $320 million cash at the time of closing from this transaction. OB estimates its EBITDA in 2013 was around 529 billion KRW or about $500 million at current exchange rates. The re-integration of OB into AB InBev's global platform is likely to generate benefits from a variety of sources, including maximizing OB and AB InBev's portfolios of leading beer brands to drive premium growth and realizing improved efficiencies from sharing best practices between OB and AB InBev, the companies noted.

According to the companies, this deal returns OB to the AB InBev portfolio, after AB InBev sold the company in July 2009, following the combination of InBev and Anheuser-Busch, in support of the company's deleveraging target. AB InBev would reacquire OB earlier than July 2014, as it was originally entitled to under the 2009 transaction.

Since KKR and Affinity entered into a partnership with OB in 2009, OB has grown to become the largest brewer in South Korea, driven by strong growth of the Cass brand. Also, OB and AB InBev remained as long-term partners through OB's exclusive license to distribute select AB InBev brands in South Korea such as Budweiser, Corona and Hoegaarden.

Though this transaction does not represent a material increase in leverage, AB InBev now anticipates to achieve a ratio below 2.0x after the end of 2014. The deal may close in the first half of 2014.