AB InBev Plans Asian IPO as Brewer Seeks to Reduce Debt

(Bloomberg) --

Anheuser-Busch InBev NV confirmed a plan for an initial public offering of its Asian unit that would allow the world’s largest brewer to reduce its debt and pursue acquisition opportunities in that region.

The brewer said Tuesday it might sell a minority stake in its Asia Pacific business and list the shares on the Hong Kong Stock Exchange. AB InBev also reported its fastest earnings growth in five quarters, joining brewers such as Heineken NV that have reported a strong start to the year.

The maker of Budweiser is coming under pressure to reduce its leverage, which has piled up since it acquired SABMiller in 2016 for more than $100 billion. The company cut its dividend payment in half in October to amass funds to pay down debt, and S&P Global Ratings said in March it may cut its credit rating. Moody’s Investors Service downgraded AB InBev one level late last year.

Earnings before interest, taxes, depreciation and amortization rose 8.2 percent in the first quarter, beating a company-compiled consensus.

Big brewers are on a more stable footing after years of ceding market share to craft and local beers. The company maintained its forecast for robust growth this year based on demand for premium brands in developing countries.

AB InBev stock has gained 36 percent this year.

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