Shares in Asahi were on track for their biggest one day fall in over three years following the Japanese company’s decision to acquire Anheuser-Busch InBev’s Australian operations, significantly increasing its debt load in the process.
In early morning trading in Tokyo on Monday, the company’s stock was down as much as 6.8 per cent in its first trading session since Asahi said late on Friday that it had agreed to buy Carlton & United Breweries for an enterprise value of $11.3bn. The broader Topix was down 0.4 per cent.
The deal is a significant move for Asahi as it seeks growth outside its shrinking home market. It has previously spent €9.9bn on acquiring assets from AB InBev, including on brands including Pilsner Urquell, Peroni and Grolsch.
However, investors are likely concerned about the amount of new debt Asahi will take on as a result of the acquisition. The company said the deal would increase its net debt to above four times earnings before interest, tax, depreciation and amortisation. It will also issue up to $1.9bn in new equity to finance the acquisition.
The agreement to sell Carlton to Asahi came shortly after Belgium-listed AB InBev abandoned a plan to list its Asian business after investors balked at the mooted valuation of $54.2bn to $63.7bn.
AB InBev’s shares rose by nearly 6 per cent on Friday after the announcement of the Asahi deal.