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AB InBev exploring options for packaging unit: Reuters
Posted on Thursday, 28 November 2019 10:47
One of the world’s largest brewers, Anheuser-Busch InBev (AB InBev), is weighing alternatives for its packaging business, which could be valued at between USD 5.00 billion and USD 6.00 billion, people with knowledge of the situation told Reuters.
These sources observed that a sale of a minority stake or a joint venture for the bottling and canning assets in North America are among the options being considered.
AB InBev is not eyeing a full disposal of the division, which also makes packaging for other businesses, although counts its owner as its main customer.
Deutsche Bank has been hired to work on the strategic review, with the insiders noting it has already been sounding out private equity investors.
AB InBev is looking to streamline its operations and focus on core brewing activities as a result of the potential partial sale.
The packaging assets were acquired in 2008 as part of the acquisition of Anheuser Busch.
Following the GBP 100.67 billion purchase of SABMiller in 2016, AB InBev has been looking to reduce debt, which has included sales of its Australian operations, beer brands in Europe and listing part of its division in Asia, Reuters observed.
One of the sources added that he expects the packaging business to be valued at 11.0x its earnings before interest, taxes, depreciation and amortisation.
AB InBev’s website says that by 2025 all of its products will be in packaging that is returnable or made from majority recycled content.
Companies operating in the packaging and labelling services sector have been targeted in 36 deals announced worldwide since the start of 2019, according to Zephyr, the M&A database published by Bureau van Dijk.
In the largest of these, Trivium Packaging acquired Ardagh Group's Food & Specialty Metal Packaging business for USD 2.50 billion.
Ionisos, Org Technology, Bland and Pack and Yunnan Hongchuang Packaging, among others, have also been targeted in 2019 to date.
© Zephus Ltd