Japan’s Asahi Signs $11 Billion Loan To Buy Anheuser-Busch’s Australia Biz


Japan’s Asahi Group Holdings said it has signed a 1.185 trillion yen ($11 billion) loan with Sumitomo Mitsui Banking Corp (SMBC) to finance the acquisition of Anheuser-Busch InBev’s (BUD) Australian subsidiary Carlton & United Breweries.

Back in July, Anheuser-Busch, the world’s largest beermaker said it entered into an agreement for the Japanese beer maker to buy its Australian operations for an enterprise value of A$16 billion ($10.4 billion). The deal has received regulatory approvals and is expected to close on June 1.

The brewer of Budweiser, Corona and Stella Artois said it will use the proceeds of the sale to reduce debt.

Shares in Anheuser-Busch have this year seen their value cut in half as global lockdown orders tied to the coronavirus pandemic have curtailed beer and other alcohol sales as restaurants and bars remained closed and some countries like Mexico were forced to shut down beer production.

The stock declined 0.6% to $40.90 as of Friday’s close in U.S. trading.

Last week J. P. Morgan analyst Celine Pannuti upgraded Anheuser Busch’s stock rating to Hold from Sell due to valuation, while keeping the $39 price target intact.

At the same time, the analyst cautioned investors to stay defensive in the European beverages sector amid expectations of a “much worse” second quarter following the worst quarter in recent history for the sector due to the fast spread of the coronavirus pandemic.

Overall, Wall Street analysts are cautiously optimistic about the stock’s outlook. It scores 3 Buy ratings and 6 Hold ratings from analysts, which add up to a Moderate Buy consensus. Analysts do see some recovery in the shares with the $60.02 average price target indicating 47% upside potential over the coming year. (See Anheuser-Busch stock analysis on TipRanks).  

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