AB InBev shares slide after demise of IPO plans

Credit: Reuters Studio
Published on July 15, 2019 - Duration: 01:43s

AB InBev shares slide after demise of IPO plans

AB InBev shares fell Monday after the demise of its planned Hong Kong IPO.

Julian Satterthwaite reports.


AB InBev shares slide after demise of IPO plans

Shares in the world's biggest brewer dropped Monday (July 15).

AB InBev down around two percent in morning trade.

Markets were getting their first chance to react to the demise of its Hong Kong share listing.

The firm had planned to sell a stake in its Asia-Pacific unit.

It blamed market conditions for the late-Friday (July 12) cancellation.

Reuters Breakingviews' Dasha Afanasieva says there were likely other reasons too: REUTERS BREAKINGVIEWS DASHA AFANASIEVA SAYING (ENGLISH): "AB InBev CEO Carlos Brito wanted someting like ten billion dollars in proceeds from this IPO, and really in order to get that the valuation was just too high.

The other parameter is that it's very typical for deals in the region to have an anchor investor and Budweiser, which was what they were calling the listing in Asia, didn't have that." The IPO was supposed to achieve two things for AB InBev.

It would have reduced its over-100-billion dollar debt mountain, built up in acquiring rival SAB Miller.

And it would have given it money to invest in a faster-growing region for beer.

Asian consumers are seen trading up to premium-branded brews over local drinks.

Now trying the IPO again could prove difficult: REUTERS BREAKINGVIEWS DASHA AFANASIEVA SAYING (ENGLISH): "It would likely have to accept a lower valuation, it may have to do some rearranging on how the deal is structured.

It is a possibility".

Failing that, AB InBev may have only option: sell more beer.

But for a firm with a history of buccaneering deals, that may just seem a little too ordinary.

One other question for investors now.

Will Alibaba drop its plans for an even bigger Hong Kong IPO?

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