Anheuser-Busch InBev Sells Final Stake in Tsingtao
Chen Fashu, one of the richest men in China, has entered into an agreement to buy a 7% stake in Tsingtao Brewery from Anheuser-Busch InBev for $235 million. Once the sale goes through, InBev will have completely cashed out of China's largest brewery.
Following InBev's $52 billion acquisition of Anheuser-Busch last year, the newly formed company fell foul of China's new anti-monopoly law. The regulator said the new drinks behemoth would be unable to increase its pre-existing stakes in Tsingtao Brewery and Zhujiang Beer.
Instead InBev started to do the opposite. In January, it entered into an agreement to sell 19.9% of its 27% stake in Tsingtao to Japan's Asahi Breweries for $667 million. The sale was part of InBev's deleveraging process to raise cash to pay off loans taken out to carry last year's acquisition. As part of the same process, Inbev last week sold its Korean asset, Oriental Breweries, to private equity firm Kohlberg, Kravis, Roberts and Company (KKR) for $1.8 billion.
In the agreement made with Chen, InBev will sell 91.6 million shares at a price of HK$19.83 apiece—slightly higher than the HK$19.78 that Asahi paid a few months ago. The price is a 10% discount to the closing price of Tsingtao's Hong Kong-listed H-shares on Friday.
According to Forbes' latest China rich list, Chen Fashu is China's 31st richest man, worth $945 million. Much of his wealth comes from the gold mining company Zijin Mining, in which he owns about 12%, according to Hong Kong stock exchange disclosure filings. Since the publication of the rich list in late October, Zijin's H-shares have nearly quadrupled in value, suggesting that Chen is already an awful lot richer. A stake in one of the nation's most iconic brands is a fine addition to any Chinese tycoon's portfolio.
Established in 1903 by German inhabitants of the northern city of Qingdao, Tsingtao has a long heritage. According to the company's website, it is sold in more than 50 countries, and its overseas sales make up more than half of China's beer exports. Tsingtao was introduced to the US in 1972, where it is the best-selling Chinese beer, according to the company's website.