Budweiser Brewing Co APAC Prepares For IPO

In what could be the biggest initial public offering (IPO) this year to date, Anheuser-Busch InBev SA’s Asia-Pacific unit is aiming to raise up to $9.8 billion. Budweiser Brewing Co. APAC Ltd. has reportedly begun to take orders for the offering, which is said to make its Hong Kong stock exchange debut on July 19, The Wall Street Journal reported.

The Asia business of AB InBev comprised roughly 18 percent of its first-quarter total volume and encompasses brands such as Stella Artois, Corona and Budweiser. The unit’s major markets include Australia, South Korea, Vietnam, India and China. And, according to Euromonitor, Budweiser is China’s third-biggest beer brand by retail sales. AB InBev also the owner of Harbin, which is a Chinese brand that stands at fifth in retail sales.

The company is said to have brought its operation in China from a fringe business to a top-five market. Once it made Budweiser into a leading brand, it made the decision to bring in higher-margin brands that are pricier like Corona and Stella Artois through a distribution system that brings products to bars and restaurants that more affluent customers visit.

“The Chinese [who] are more affluent are going from traditional Chinese channels to more Western,” AB InBev Chief Executive Carlos Brito said, according to the paper. “So white-tablecloth restaurant as opposed to traditional Chinese restaurant, pubs as opposed to traditional KTV.”

The report also noted that consumption of beer in China on a per capita basis has fallen in recent times while consumers turn to craft beer, baijiu and wine. However, revenues are reportedly on the uptick as beer drinkers there choose more expensive brews.

In May, news surfaced that Budweiser APAC filed an application for a Hong Kong stock exchange listing. The company was seeking a $70 billion valuation per an unnamed source at the time. It was also noted that funds from an IPO could aid the unit in reducing debt and enabling it to make Asian acquisitions.