Budweiser IPO in Hong Kong: AB InBev prepares for listing

The Budweiser brewer’s upcoming initial public offering on the Hong Kong Stock Exchange could be the largest ever for a food or drink company.

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Anheuser-Busch InBev, the world’s biggest brewer, announced in May that its Asia-Pacific subsidiary, Budweiser Brewing Company APAC Limited, had filed to list shares on the HKEX.

The company is seeking to raise as much as $9.8 billion and began taking orders from investors Tuesday, The Wall Street Journal reported. The IPO would debut on July 19 and value the business at as much as $63.7 billion.

J.P. Morgan Securities (Far East) Limited and Morgan Stanley Asia Limited are the joint sponsors for the IPO, AB InBev announced in May.

In its first quarter earnings report, company management listed China as one of its “key markets” that drives growth. Its revenue in China grew by 7.8 percent. Also, they said the listing will accelerate efforts to pay off the company’s large debt.

AB InBev is worth about $172 billion, with Asian operations accounting for as much as a third of that, the Associated Press reported.

In China, per capita beer consumption has declined recently, with consumers favoring craft beer, wine and local spirits, The Wall Street Journal reported. But revenues in the competitive market have still grown as drinkers choose more expensive options, helping brewers in the country trade at higher valuations than elsewhere, where beer volumes have slowed.

AB InBev’s portfolio of brands and position in the industry “provide an attractive platform” for potential mergers and acquisitions in the region, the company said in its earnings report. Pulling in more brands could help Budweiser APAC control a larger portion of the highly competitive Asian-Pacific beer market, where the top three brewers have less than half of the market share, the Journal reported.

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Budweiser Brewing Company APAC already produces, imports, markets and distributes more than 50 beer brands in Asia and Australia, including Budweiser, Stella Artois, Corona and Hoegaarden.