The field of bidders for SAB Miller‘s Central and Eastern European beer brands being sold by Anheuser-Busch InBev has narrowed after U.S. buyout fund Bain Capital walked away, sources told Reuters on Tuesday.
Acquisitive Japanese brewer Asahi Group is seen as a front-runner to buy the brands, which include Pilsner Urquell in the Czech Republic and Tyskie and Lech in Poland, the sources said.
The package is expected to fetch around 6 billion euros (US$6.4 billion), they added.
The other bidders are a consortium led by Swiss investment firm Jacobs Holding and PPF, the investment firm of Czech business tycoon Petr Kellner.
Bain was initially planning a joint offer with Advent International. Its departure raises questions over Advent’s ability to submit a competitive offer without a partner.
Representatives for AB InBev, Bain and Advent declined to comment.
Asahi recently outbid private equity funds in the race to buy SABMiller’s Peroni and Grolsch.
The Asian brewer wants to offset slow growth in its home market and can justify paying a higher price for overseas acquisitions based on the cost benefits it would extract and the ability to use the brands to boost its international sales.
But European buyout fund Advent remains keen to vie for AB InBev’s beer brands and is scrambling to meet a December 12 deadline for binding bids, two of the sources said, cautioning that the transaction would absorb a significant portion of its newly-raised fund.
AB InBev wants to sign a deal by Christmas, the sources said. It is selling the brands as part of its US$100 billion-plus acquisition of SABMiller, which closed in October.
China Resources, which earlier bought out SABMiller’s stake in a Chinese joint venture, also made a competitive bid in the first round of the auction and is seen as a serious contender, according to another source.
The Jacobs-led consortium, advised by Goldman Sachs, is backed by Canada’s PSP Investments, which manages pension funds of its armed services and famed Mounties, as well as Czech family office R2G.
Jacobs, which previously failed to buy Peroni and Grolsch, is keen to invest in the consumer sector, the sources said.
By Pamela Barbaglia and Martinne Geller (London)
(Additional reporting by Jan Lopatka in Prague; Editing by Alexander Smith/Ruth Pitchford)
Photo courtesy of Reuters/David W Cerny