Monday, January 20th, 2014
SEOUL, KOREA - Belgium's Anheuser-Busch InBev SA is close to a deal to reacquire Korea's Oriental Brewery. For the past 16 years since 1998, Oriental Brewery will see its owner change three times.
According to major foreign media reports such as Les Echos and the Wall Street Journal on January 17, AB InBev is in the final stage of negotiations to purchase the Korean beer maker at US$4.5 billion from Kohlberg Kravis Roberts & Co.
Originally established as Showa-Kirin Brewery Co. in 1933, Oriental Brewery was owned by Doosan Group for 46 years until 1998 when it was sold to AB InBev. In two occasions in 2001 and 2006, AB InBev bought the remaining shares of Oriental Brewery and became the largest shareholder in the company. But it had to hand over the ownership to KKR & Co. in 2009 at $1.8 billion after taking excessive debts when it acquired Anheuser-Busch of the United States at $52 billion in 2008.
The reason AB InBev is reacquiring the Korean company has to do with its strategy to use it as the base to expand across the Asian market. Already, Oriental Brewery is producing AB InBev brands such as Budweiser and Hoegaarden for Korean beer drinkers. Its "Blue Girl" beer brand is ranked No. 1 in Hong Kong. Once the deal goes through as planned, KKR & Co. is expected to reap a profit of $2.7 billion from the deal, excluding dividends thus far.
Separately, Lotte Group, which had been rumored to be the strongest candidate to acquire Oriental Brewery, will plunge into the domestic beer market with its own brand within the first half of the year.