Anheuser-Busch InBev also known as AB InBev (NYSE: BUD), the world’s largest brewer acquired Oriental Brewery, the leading brewery in South Korea from private equity firms, KKR & Co. L.P. (NYSE:KKR) and Affinity Equity Partners for $5.8 billion.
The South Korean brewer was previously owned by AB InBev (NYSE:BUD), but sold it in July 2009 as part of its merger agreement with Anheuser-Bush to meet its deleverage target. Oriental Brewery remained a long-term partner of Ab InBev with an exclusive license to distribute Budweiser, Corona and Hoegaarden.
The current transaction will bring back Oriental Brewery under the portfolio of AB InBev.
In a statement, Carlos Brito, CEO of AB In Bev (NYSE:BUD) said, “We are excited to invest in South Korea and to be working with the Oriental Brewery team again. OB will strengthen our position in the fast-growing Asia Pacific region and will become a significant contributor to our Asia Pacific Zone.”
Brito also said that AB InBev (NYSE:BUD) will work with the team of Oriental Brewery to continue to boost its brands in South Koreas and to provide additional choice to consumers and share best practices.
“We expect to be strong contributors to the Korean economy and community, fulfilling our global commitment to establish AB InBev as a leading corporate citizen in the markets in which we operate,” added Brito.
According to the largest brewer, South Korea is an attractive market because of its strong domestic growth outlook. The annual growth rate of beer volumes in the country was approximately 2% from 2009 to 2012. Premium brands grew around 10% per year during the same period. The beer market in South Korea is expected to climb by more than 13% from 2012 to 2024.
Oriental Brewery’s Cass brand is the leading beer in South Korea supported by healthy consumer brand preference. AB InBeb (NYSE:BUD) said to build on that momentum and it will utilize its marketing capabilities and experience in brand building to expand Cass, OB Golden Lager, Cafri, Budweiser, Corona and Hoegaarden.
In-soo Chang will continue to serve as chief executive officer of Oriental Brewery after the closing of the acquisition agreement. Oriental Brewery will be included in the Asia Pacific Zone of AB InBev (NYSE:BUD) under the leadership of Michel Doukeris, president.