The article discusses SABMiller selling some of its Eastern European beer brands, including Pilsner Urquell, Tyskie and Lech. These premium beer brands in fast growing markets like Czech and Poland are attracting investors like China Resources, Asahi Group, Bain Capital, PPF Group and Jacobs Holding. The bidding price has exceeded 5 billion euros, way above SABMiller’s expected price. This shows strong investor appetite for established beer brands with growth potential.
Chinese company China Resources joins bidding for SAB’s European beer brands
China Resources, a Chinese state-owned conglomerate, is one of the five bidders left for SABMiller’s Pilsner Urquell, Tyskie and Lech beer brands in Eastern Europe. This follows China Resources’ full acquisition of China’s largest brewer, Snow Beer, for $108 billion earlier in 2016. The SAB brands would provide China Resources a globally recognized portfolio to complement leadership in China. With availability of funds and motive to expand globally, China Resources seems a strong contender for the deal.
Asahi emerges as prolific acquirer after SABMiller-ABInBev merger
Asahi Group Holdings, Japan’s leading brewer, has been actively acquiring beer brands divested after the SABMiller and ABInBev merger. Earlier in 2016, Asahi spent $7.8 billion to acquire European brands Grolsch and Peroni from SABMiller. If Asahi wins this bidding, it would gain two more leading brands in the high beer consumption markets of Czech and Poland.
Private equity firms attracted to strong brands and growth runway
Prominent private equity firms Bain Capital, Advent International and PPF Group have also made bids for the SAB brands. These investors likely value the strong brand equity and steady volume growth in markets like Czech Republic, which has the highest per capita beer consumption globally. The brands offer an attractive platform to benefit from continued premiumization and growth.
Niche investment firm Jacobs Holding sees value in global specialty brands
Along with large corporates and private equity groups, niche investment firm Jacobs Holding has also made a bid. Funded by a Swiss family office, Jacobs owns several food companies includingBarry Callebaut’s specialty chocolate business. The SAB beer brands offer similarities with chocolate in being an affordable indulgence consumed regularly across income groups.
The intense investor interest and prices bid for SABMiller’s Pilsner Urquell, Tyskie and Lech beer brands in Eastern Europe highlight the strong fundamentals. Established brands with loyal consumer base, growth markets and potential for premium pricing make it an attractive investment.