Happy hour in Asia as global booze makers scout for deals
Banking and industry sources name Hong Kong-listed Kingway Brewery Holdings, China's Beijing Yanjing Brewery Co, India's Tilaknagar Industries, and KKR & Co-backed South Korean Oriental Brewery among the potential takeover or joint venture targets for global brewers. Like many other sectors, the global drinks industry is stepping up its Asian presence to offset sluggish growth at home.
“Everybody wants a slice of Asia,” said Deepa D'Souza, a consultant with global market research firm Mintel in Mumbai. “The global companies who are present there want to expand further and further in markets like China,” she added. “The problem is there are not enough suitable assets available and so there is a race to pick up whatever is around and there will be more of the takeover battles we are seeing now.”
After a two-month battle last year, Dutch brewer Heineken NV finally got control of Asia Pacific Breweries Ltd in a $6.4-billion deal. That translated into a multiple of 35 times earnings, amongst the richest paid for Asian beer acquisitions and a sign that global companies are willing to bid for Asian growth.
World No. 1 Diageo Plc's plan to buy a majority stake in India's United Spirits may spur more deals in that country's competitive spirits segment in the next couple of years, analysts said.
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