Anheuser-Busch InBev has cancelled its Asia IPO, expected to be
the largest of 2019.
- Shares of the company fell on the news.
- The company said it would closely monitor conditions in
Asia for its next move.
Watch Anheuser-Busch InBev trade live on Markets
Anheuser-Busch InBev, which produces Budweiser and Bud Light,
has called off what would’ve likely been the largest IPO of 2019 by
deciding not to take its Asia unit public.
Shares of the beverage company closed down more than 3% Friday
on the news.
The company was looking to raise as much as $9.8 billion dollars
in a public listing of Budweiser Asia, according to Reuters. It
would have been the largest IPO since Uber raised $8.1 billion in
its May listing, had it began trading on July 19 as previously
AB InBev said that the deal would allow it to expand in Asia.
Withdrawing the IPO plan suggests that while the US IPO market is
having a blockbuster year, other geographies are falling behind.
Asia has been particularly hard hit by fears that global growth is
slowing and trade tensions between the US and China.
The company said Friday that it would “closely monitor market
conditions” for its next move.
Analysts that cover the company said that AB InBev had trouble
adhering to Hong Kong’s rigorous rules around public listings,
the Wall Street Journal reported. The company didn’t have a
cornerstone investor such as a sovereign-wealth fund, large
institutional investor, local tycoon, or state-owned enterprise to
endorse the deal.
The asking price may have also been too high for investors. Once
AB InBev set a price range, it could not deviate from that range
per Hong Kong’s rules. The company could have pushed ahead with the
IPO if it set a lower price range or offered fewer shares, but the
according to the Wall Street Journal.
The IPO would’ve helped the company pay down its debt. Carlos
the elusive CEO, said in May that the company would meet its
debt reduction goals with or without the IPO in Asia. But without
the IPO, it will certainly be more difficult and may mean the
company has to wait on other deals in the works.
Source: FS – All – Economy – News
The company behind Bud Light said it won't take its Asia unit public, cancelling the largest IPO of 2019