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ASAHI GROUP HOLDINGS, LTD.

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Japan brewer Asahi says it won't bid for SABMiller's East Europe assets

05/17/2016 | 07:21am EDT
The logo of the Asahi Breweries is seen at the Asahi Ibaraki Brewery in Moriya, Ibaraki prefecture, Japan

TOKYO (Reuters) - Asahi Group Holdings Ltd will not bid for the Eastern European assets that SABMiller PLC is selling to appease anti-monopoly regulators, the president of Japan's biggest brewer said on Tuesday.

"We have been studying them but we won't raise our hand to buy," Akiyoshi Koji, who became president in March, said in an interview.

Instead, he said Asahi will focus on raising sales of the Peroni, Grolsch and Meantime beer brands that it agreed to buy from SABMiller last month for 2.55 billion euros ($2.89 billion).

Asahi is betting on those brands to significantly broaden its presence in Europe. Previously, Asahi's overseas expansion focused on Asia and Oceania, such as the purchase of New Zealand's Independent Liquor in 2011 for NZ$1.5 billion ($1.02 billion), and 19.9 percent of China's Tsingtao Brewery in 2009.

Koji also said Asahi plans to eventually sell its Super Dry beer in Europe through its SABMiller acquisition. Super Dry is Asahi's and Japan's biggest-selling beer.

The acquisition is conditional on Anheuser Busch InBev SA gaining the approval of anti-monopoly regulators to take over SABMiller.

To gain approval, SABMiller is selling its businesses in Poland, the Czech Republic, Slovakia, Hungary and Romania, as well as brands including those destined for Asahi.

While Asahi will not buy those businesses, it will still seek acquisition opportunities worldwide, Koji said. The brewer can take on additional debt of up to 300 billion yen (1.89 billion pounds) without hurting its credit rating, he said.

"Also due to the negative interest rate policy (of Japan's central bank), we can issue bonds with low interest," he said.

Asahi is unlikely to make major bets on emerging economies such as South America though they have growth potential, Koji said.

"We are looking at the United States and Europe, where we may not see strong growth but we can count on steady growth," he said

Koji said he did not feel threatened by AB InBev-SABMiller, which will command one-third of the world's beer market, as Asahi wants to focus on premium brands.

Rather, he said he was concerned about AB InBev-SABMiller's purchasing power of main beer ingredients barley and hops.

"We need to make sure we have sustainable access to ingredients," he said.

(Reporting by Taiga Uranaka and Ritsuko Shimizu; Editing by Christopher Cushing)

By Taiga Uranaka and Ritsuko Shimizu


© Reuters 2016
Stocks mentioned in the article
ChangeLast1st jan.
ASAHI GROUP HOLDINGS, LTD. 0.00% 4246 Delayed Quote.-6.50%
LETS HOLDINGS GROUP CO., LTD. 0.79% 6.37 End-of-day quote.-12.74%
SEEK LIMITED 0.74% 24.6 Delayed Quote.-26.27%
THE EASTERN COMPANY 2.29% 20.99 Delayed Quote.-16.27%
TSINGTAO BREWERY COMPANY LIMITED 1.52% 60.15 Delayed Quote.-18.84%
US DOLLAR / JAPANESE YEN (USD/JPY) -0.11% 126.964 Delayed Quote.10.13%
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Analyst Recommendations on ASAHI GROUP HOLDINGS, LTD.
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Financials
Sales 2022 2 439 B 19 154 M 19 154 M
Net income 2022 150 B 1 174 M 1 174 M
Net Debt 2022 1 424 B 11 180 M 11 180 M
P/E ratio 2022 14,5x
Yield 2022 2,67%
Capitalization 2 151 B 16 892 M 16 892 M
EV / Sales 2022 1,47x
EV / Sales 2023 1,36x
Nbr of Employees 30 020
Free-Float 93,9%
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Number of Analysts 14
Last Close Price 4 245,00 JPY
Average target price 5 757,14 JPY
Spread / Average Target 35,6%
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Managers and Directors
Atsushi Katsuki President, CEO & Representative Director
Akiyoshi Koji Chairman
Tatsuro Kosaka Independent Outside Director
Yasushi Shingai Independent Outside Director
Christina L Ahmadjian Independent Outside Director
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