Anheuser-Busch InBev is closing in on a deal to reacquire Oriental Brewery from Kohlberg Kravis Roberts and Affinity Equity Partners for more than $4.5 billion, according to people briefed on the matter.
A deal for Oriental Brewery, a South Korean brewer, would be the second big alcoholic beverages transaction of the year, coming on the heels of Suntory’s agreement to acquire Beam Inc. this week for $13.6 billion.
It would also further expand AB InBev’s international footprint, returning the company to a market it largely exited five years ago.
K.K.R. acquired Oriental Brewery for $1.8 billion in 2009 from AB InBev, as the company sold off assets to relieve the debt that resulted from the merger to create the world’s largest beer maker. Within weeks, K.K.R. sold half of the company to Affinity, a buyout shop specializing in investments in the Asia-Pacific region.
To regain the asset it had sold off, AB InBev appears poised to pay a price that will allow K.K.R. and Affinity to more than double their money.
Under the terms of the original deal, AB InBev had a right to buy back the company for 11 times earnings before interest, tax, depreciation and amortization within five years.
The deal could fall apart, but the parties hope to announce an agreement by the end of the month.
AB InBev’s appetite for the deal reflects the upbeat expectations for beer consumption in Asia, an increasingly lucrative market for brewers.
Oriental Brewery makes OB Lager and other popular Korean beers. The company does not have a major domestic rival, giving AB InBev a commanding position in that market, should a deal close.
K.K.R. and AB InBev declined to comment on Friday.
