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AB InBev Asia Unit’s Revived IPO Raises $5 Billion In Hong Kong IPO

AB InBev Asia Unit’s Revived IPO Raises $5 Billion In Hong Kong IPO
The proposed initial public offering (IPO) of the largest brewer of the world Anheuser-Busch InBev NV (AB InBev) was launched this month after the company had decided to postpone it in July because of “several factors, including the prevailing market conditions”.
However this time the company priced the IPO for its Asia-Pacific unit at the Hong Kong exchange lower at the bottom of a marketed range with the aim of raising about $5 billion. According to analysts, this also meant that the deal that the company has in the pipeline need to be lower in terms of valuations considering the ongoing protests in Hong Kong which has apparently unnerved investors.
In a separate listing, a Hong Kong IPO of up to $1.2 billion was launched on Tuesday by Topsports International Holdings, the sportswear business of Chinese footwear retailer Belle International.
These two above mentioned listing are now being considered as important for the Hong Kong stock exchange as analysts are now considering them to be indicators of the sentiment level of investors in the city considering the continuous anti-government and pro-democracy protests that are ongoing in the city currently and which have been going on for more than 16 weeks now. The protests have already impacted local business such as retail and tourism and dented the spirits of investors and the in the city which is also considered to be the financial hub of Asia.
The overall market and investor sentiment is also down because of the trade war between the United States and China as well as the slowdown of the global economy and trade.
According data from Refinitiv, so far this year, the second largest public listing globally has been the IPO of Budweiser Brewing Company APAC Ltd preceded only by the IPO in May this year of the US based ride hailing company Uber which was worth $8.1 billion.
AB InBev is the owner of more than 50 beer brands including names such as Stella Artois and Corona. The IPO for Budweiser was priced at HK$27 ($3.44) per share, the bottom end of the HK$27 to HK$30 indicative range, the company said on Tuesday.
The Australian operations of the AB InBev is not included in the revived IPO as the company has agreed to sell that business to Japan’s Asahi Group in a deal valued at $11 billion soon after the company decided to postpone the IPO previously.
Without the large but mature Australian business, the focus of the AB InBev’s Asia-Pacific business would be to ensure growth in the Asian markets such as those in China, India and Vietnam. Analysts say that is bifurcation of its business has helped sale of the IPO to investors.
“The company has top-notch assets and without the slow-growing Australian operations the deal has become more attractive than last time,” said sa report quoting one source with knowledge of the Budweiser IPO. “And today’s low end pricing would give the stock more upside potential in the public market.”

Christopher J. Mitchell

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