Anheuser-Busch InBev SA is seeking to raise up to HK$36.85 billion in net proceeds in its second shot at a Hong Kong IPO of its Asian arm, Budweiser Brewing Company APAC Ltd., roughly half of the amount it hoped to generate during its first attempt in July.
The company announced Sept. 17 that it would offer 1,262,350,000 shares, or 9.53% of its outstanding stock, at a price range of HK$27 to HK$30. Provided no adjustments are made to the offer size, Budweiser Brewing will list with a market capitalization of up to HK$391.62 billion, or about US$50 billion, the company said in the hard copy of its IPO prospectus.
The offering also includes an offer size adjustment option that allows the company to issue a further 464,952,000 shares, or about 36.8% of the basic offering, plus a separate over-allotment option of up to 15% of the total offering.
AB InBev will use the proceeds to pay down debt.
Budweiser Brewing's earlier offering was priced between HK$40 and HK$47, which many analysts said was too high. The company cancelled the offering, which would have been the largest globally in 2019, citing prevailing market conditions.
One of the key differences this time around is that Singaporean sovereign wealth fund GIC has signed on as a cornerstone investor. According to the prospectus, GIC has agreed to buy US$1 billion of shares.
Jan Craps, executive director and CEO of Budweiser Brewing, said during a press conference that the current deal portrays a more convincing growth story than the previous attempt. He cited the high-growth China market, which contrasts with the more mature Australian operations that the company has since agreed to sell to Asahi Group Holdings Ltd. for about US$11.3 billion. That transaction will be completed in the first quarter of 2020.
"I do believe that we have a different situation," said Craps. He acknowledged that the deal is dependent on the right market conditions but said there is strong demand for the IPO.
Craps confirmed the beermaker's ambitions to pursue acquisitions in Asia following the IPO.
"We have been quite explicit from the start when we launched the IPO couple of months ago that we want to be a regional champion in Asia. We believe this can be the platform for consolidation in the region," he said.
"Probably Southeast Asia will be the most interesting option for us to look at expanding our platform. When you look at Southeast Asia, there are interesting markets. You would think of Vietnam, Thailand, Philippines, Myanmar and Laos that are showing healthy growth," he explained.
If the Budweiser Brewing IPO does go ahead, it will be the biggest listing so far this year in Hong Kong amidst protests and civil unrest that have caused Alibaba Group Holding Ltd. to put its plan for a second listing on hold.
"We believe that Hong Kong is the best financial center for us in Asia to do the listing. We believe that there is very strong foundation. We believe that there is very bright future for Hong Kong as a financial center," said Craps.
Craps said the minimum dividend payout will be 25%, which he said shows an "explicit commitment to the market."
The company plans to finalize pricing Sept. 23 and begin trading Sept. 30 under the ticker BUD APAC.
