Asahi to take on Peroni

The Japanese producer would be willing to offer a substantial sum for the Italian Peroni and the Dutch Grolsch breweries, put up for sale by SabMiller so as to push the merger with AB Inbev
Asahi to take on Peroni

The rumours of SabMiller selling Birra Peroni that were fuelled about a month ago, have obtained a first crucial confirmation: the Japanese daily Yomiuri Shimbun has disclosed a possible offer of about 400 billion yen (3.12 billion euro at current exchange rates) of the Japanese Asahi group holding company for the takeover of the Italian corporation and the Dutch brewer Grolsch, another famous brand put up for sale by the company of South African origin. The decision to sell the two brands is undoubtedly the repercussion of an agreement of integration with Anheuser Busch Inbev that will create a global giant of “blondes”: Megabrew – as the new conglomerate will be called—wants to cede some European brands of significance in order to get green lights from the EU Antitrust for the merger, as it happened in the U.S. with the complete transfer of the Miller brand to Molson Coors, with whom they joint-ventured. Peroni (with the Blue Ribbon) and Grolsch are two of the four global brands of SabMiller: the other two are Miller, which has already been ceded, and Pilsner Urquell, which would remain the sole spearhead within the company acquired by AB InBev. SabMiller bought 60% of Peroni in 2003 by paying 246 million euro plus 165 million euro for the remaining 40% in 2005. Grolsch was paid 877 million euro in 2007: the amount is around 1.28 billion euro. That would mean a potential gain that exceeded 1.8 billion euro, not considering subsequent investments. A source contacted by Reuters estimates the cumulative EBITDA value of the two prey companies at between 120 million to 150 million euro. If this estimate were accurate, the price the Japanese company, according to initial rumours, would be willing to pay, would be very high but allow them to get off to a flying entry on the European market with two historical brands of high value under their belt.

No official confirmation has been issued so far on the part of Asahi, the second Japanese beer producer which is well-known also in Italy where it has been distributed for many years.

In 2014, the most recent available data, Birra Peroni has reported a turnover of 347 million euro, essentially unchanged with respect to the previous year, with a gross operating surplus (EBITDA) of 39.7 million (48.5 million in 2013) and profits and losses of 23 million (32.7 in 2013). There were 719 employees. Peroni’s strength lies especially within international activities: leafing through SabMiller’s annual balance sheet, we can track a growth of 30% in volume in Australia, where Peroni “marks 8% of all imported premium beers” and in England, where the sales volume grew “to a double-digit”, boosting all the on-site business of the corporation. The problems are in Italy, where the market is stagnant or yielding and even the Roman house is no exception.

Asahi holding, that like many Japanese companies is facing some internal economic struggle resilient to growth, is a major multinational beverage industry in Asia, with a turnover that equalled 10.6 billion euro in the first nine months of 2015 (at today’s euro – Yen exchange rate) and a forecast to end the year with 14.5 billion euro, a growth of 4.2% compared to 2014. Profits and losses should reach one billion euro, equally marking a growth. The company, led by Naoki Izumiya, is a public company with a broad shareholder base that has amongst the first shareholders only financial institutions, mainly Japanese ones. Not being a “pure beer company”, it also has extensive interests in soft drinks, food, and spirits where it is present with Japanese whiskey with the famous Nikka distilleries. It also owns an important share, even if a minority, of the Chinese brand Tsingtao that is second in China in terms of sales after SabMiller’s Snow, and very well-known in the circle of Chinese restaurants.

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