News & Analysis

SABMiller’s Peroni and Grolsch likely to be bought by private equity

SABMiller is selling the two premium brands as 3G Capital-backed InBev waits for regulatory approval for its buyout of the brewing giant.

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The expected sale of SABMiller’s beer brands Peroni and Grolsch is attracting interest from European private equity firms PAI Partners, BC Partners, Cinven and Permira, Reuters has reported.

US-based firms KKR, Bain Capital and TPG, all known for aggressive buyouts, are also said to be exploring an acquisition, forecast to be decided by the end of March.

The decision to sell two of SABMiller’s premium brands comes on the back of what is set to be one of the biggest takeovers in corporate history. 3G Capital-backed Anheuser-Busch InBev is waiting for approval from European regulators for its $100 billion-plus acquisition of rival brewer SABMiller. The two companies are the biggest brewers in the industry. Combined, they will produce about a third of the world’s beer.

The brands will be sold to make approval more likely and straightforward. Should it fall through, InBev will be hit with a $3 billion break-up fee.

All the interested firms have a history of investing in Europe, and firms like PAI have a strong history of investing in the food industry. PAI Partners has led 54 buyout investments for a value of €38 billion, according to their website. The firm is selling assets from its PAI Europe Fund IV, while it made its first investments from its €3.3 billion Fund VI after closing in March.

BC Partners, a buyout firm, says it is advising funds worth more than €12 billion. Its website says that to date, the firm has completed 90 acquisitions with an enterprise value of nearly €100 billion. All firms are deploying capital from closed funds to target European companies.

SABMiller is likely to decide the deal by March, according to Reuters. Japan’s Asahi Group Holdings and Spain’s San Miguel are also thought to be potential buyers.

SABMiller and Coca-Cola’s proposed mixing, bottling and distribution operations in Africa were given preliminary approval by South Africa’s competition watchdog yesterday. SABMiller, which was set up as South African Breweries in 1895, is top brewer in Africa, a position which makes it attractive to InBev.