Brewers Asahi and Damm vying with private equity firms for Peroni, Grolsch, say sources: Reuters

Japan’s Asahi Group Holdings and Spain’s S.A. Damm have submitted offers for SABMiller’s Peroni and Grolsch beer brands alongside a handful of private equity bidders, three sources with direct knowledge of the matter said on Friday.

The two brands, which are to be sold as part of Anheuser-Busch InBev’s $100 billion-plus takeover of SABMiller, have attracted non-binding bids from European private equity funds PAI Partners, BC Partners and EQT, the sources said on condition of anonymity.

U.S. buyout funds Bain Capital and KKR have also submitted tentative bids after a deadline on Thursday, the sources said.

AB InBev is expected to shortlist the bidders who will be admitted to the final stages of the auction early next week and wrap up the process by the start of March, the sources added.

AB InBev, SABMiller, Asahi, Damm, PAI, BC Partners, Bain Capital, KKR and EQT declined to comment.

AB InBev launched the sale last year of Peroni and Grolsch to ease regulatory scrutiny over its European portfolio that already includes Corona and Stella Artois.

Meantime Brewing, a small UK craft beer that SAB acquired last year, is also included in the sale.

AB InBev faces paying SABMiller a $3 billion break-up fee if its takeover plan fails.

The Belgian brewer aims to receive binding offers in February in what bidders described as a “tight timetable” with due diligence taking place in less than a month, the sources said.

The tight deadline favors private equity firms over trade buyers and shows AB InBev is valuing time over money. Because financial buyers don’t have to assess a deal’s impact on their current operations, they can pull the trigger more quickly, but won’t bid as much since they lack synergies.

One of the sources said that private equity funds have valued the assets at north of 2 billion euros ($2.2 billion) and may struggle to match a higher bid from Asahi and Damm who would use the brands to kickstart their own international sales.

Asahi said on Tuesday that it was considering acquiring Grolsch and Peroni in a deal that would help it access growth outside Japan.

The source said Asahi and Damm could pay as much as 3 billion euros for the assets, valuing Peroni and Grolsch at 14 or 15 times their combined earnings before interest, taxes, depreciation and amortization (EBITDA) of 180-200 million euros.

Another source said Damm could improve its bid by teaming up with KKR on a joint bid after they previously formed a consortium to bid for Spanish fishing firm Pescanova in 2013.

Known for its Super Dry beer, Asahi is Japan’s biggest brewer with 38 percent market share.

Barcelona-based Damm is known for its Estrella Damm which has been brewed since 1876 and is one of the most popular beers in the Barcelona area.