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The Belgium-based brewer has been selling assets and listed its
Asian business in Hong Kong in September to help reduce net debt
that rose to some $100 billion after its 2016 acquisition of
rival SABMiller.
It hoped to close the sale of Carlton & United Breweries (CUB)
to Asahi in the first quarter of 2020.
But the Australian Competition and Consumer Commission (ACCC),
in a preliminary view, said that the deal will reduce
competition in the cider market and might also do so for beer,
adding it will make a final decision on March 19.
"The proposed acquisition would combine the two largest
suppliers of cider in a highly concentrated market," it said,
stating the combined business would control about two thirds of
cider sales.
It also said Asahi may act as a competitive constraint on the
two largest beer brewers - CUB and Lion - and has "the potential
to be an even bigger threat in future".
Bernstein analysts said this was likely to require Asahi to
dispose of a cider brand, but the impact was manageable.
In the worst case scenario, Ashai might offer to shed AB InBev
beer brands Beck's, Stella Artois and Budweiser locally. Losing
Corona though would be a likely deal-breaker, Bernstein said.
Jefferies analyst Edward Mundy, said he expected brand
disposals, with a possible delay to the deal closure.
"We do not believe that this preliminary ruling would be
insurmountable to the deal taking place," he said.
Asahi said it was not planning any changes for now, and would
continue providing regulators with information. AB InBev was not
available for comment
Shares in Asahi fell to a three-month low and closed down 1.1%
on Thursday. AB InBev shares sunk to an eight-month low and were
down 1.4% at 1230 GMT, making them one of the weakest performers
in the FTSEurofirst 300 index <.FTEU3> of leading European
stocks..
For Asahi, the deal would turn propel the Japanese firm into the
major league of brewers, although well behind leaders AB InBev
and Heineken <HEIN.AS>.
It is set to gain leading Australian beer Victoria Bitter,
placing it in more direct competition there with Japanese rival
Kirin <2503.T>, which produces the XXXX Gold brand through its
Lion subsidiary.
Asahi is the second largest supplier of premium international
beers in Australia with Asahi Super Dry and Peroni.
(Reporting by Aby Jose Koilparambil in Bengaluru; Additional
reporting by Ritsuko Ando in Tokyo and Philip Blenkinsop in
Brussels; Editing by Miyoung Kim, Muralikumar Anantharaman and
Keith Weir)
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