Strong showing by Budweiser stock in Hong Kong market debut

Shares in AB InBev’s Asia Pacific unit were priced at the bottom of the marketed range following a delay in its listing.

Portfolio beer brands of Budweiser Brewing Company APAC Ltd
AB InBev had delayed plans to list its Asia Pacific unit on the Hong Kong stock exchange in July due to 'prevailing market conditions', among other factors [ File: Andrew Geoffrey Jackson/Reuters]

Shares in Anheuser-Busch InBev NV’s (AB InBev) Asia-Pacific unit, which last week raised about $5bn after relaunching its initial public offering (IPO), has gained as much as 4 percent on their market debut in Hong Kong.

AB InBev, the world’s largest brewer, relaunched the unit IPO this month after cancelling a plan for a bigger float in July citing “several factors, including the prevailing market conditions”.

The Asia unit, Budweiser Brewing Company APAC Ltd, raised about $5bn in the world’s second-biggest IPO this year, after pricing the Hong Kong float at the bottom of a marketed range.

Budweiser APAC shares rose to as much as 28.10 Hong Kong dollars ($3.58) at open on Monday, compared to its IPO price of 27 Hong Kong dollars ($3.44)  per share. The stock was trading at 28 Hong Kong dollars ($3.57), up 3.79 percent, at 10am local time (02:01 GMT), while the market index was down 0.2 percent.

Proceeds from the IPO of Budweiser APAC, whose portfolio of more than 50 beer brands includes Stella Artois and Corona, will help AB InBev reduce debt of over $100bn accumulated following the purchase of rival SABMiller in late 2016.

The brewer also has another goal – to create an Asian champion to spur consolidation. Analysts see the brewing assets of San Miguel of the Philippines or of Thai Beverage as possible partners or targets.

JPMorgan and Morgan Stanley are the joint sponsors of the Budweiser IPO. They are also among the global coordinators for the offering with Bank of America Merrill Lynch and Chinese investment bank CICC.

The IPO is the second-largest in the world for 2019 after Uber Technologies Inc went public at $81bn in May, according to Refinitiv data.

AB InBev had initially tried to raise up to $9.8bn in July, with shares to be priced between 27 Hong Kong dollars ($3.44) and 30 Hong Kong dollars ($3.83) apiece.

Source: Reuters