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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Asahi Group Holdings, Ltd.    2502   JP3116000005

ASAHI GROUP HOLDINGS, LTD.

(2502)
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End-of-day quote. End-of-day quote Tokyo Stock Exchange - 01/22
4341 JPY   +1.14%
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Japan's Asahi looks beyond Brexit Britain with Fuller's beer buy

01/25/2019 | 06:59am EST
Condensation collects on a glass of Asahi beer at a bar in Singapore

(Reuters) - Japanese brewer Asahi Group is buying the British beer business of Fuller, Smith & Turner, seizing the opportunity to further its overseas reach as other companies wrestle with growing uncertainty over Brexit.

The purchase, worth 250 million pounds ($327 million)including debt, raises Asahi's British presence by adding London Pride ale, Frontier lager and Cornish Orchards cider to its Asahi Super Dry, Peroni Nastro Azzurro and Meantime brands.

Fuller's shares jumped 21 percent to 1100 pence on Friday, their highest level in 19 months, after Asahi's move, which follows Japanese Prime Minister Shinzo Abe voicing his concerns over the risk of a disorderly British exit from the European Union in March and its impact on business.

Japanese firms have spent more than 46 billion pounds ($59 billion) in Britain, encouraged by successive British governments since Margaret Thatcher promising them a business-friendly base from which to trade across Europe.

Asahi plans to continue operations at the Griffin Brewery in Chiswick, London, where beer has been made since 1654, while a long-term supply agreement and strategic alliance between the firms will allow Fuller's pubs to continue to sell its beer.

The global beer market, dominated by big players such as Anheuser-Busch InBev and Heineken, has been challenged lately by the rise of independent craft brews and shifting consumer tastes favouring wine and spirits.

However, Mintel estimates that the value of Britain's beer market rose by 3.9 percent to 18.5 billion pounds in 2018.

"This transaction is unexpected but a welcome one – realising a significant value for shareholders and exiting a challenging beer market," Liberum analyst Anna Barnfather said.

Barnfather said her target price of 1050 pence for Fuller's had valued the brewery division at around 125 million pounds. Asahi confirmed that the purchase includes the freehold of the Chiswick brewery.

Fuller's said the disposal will enable it to focus on pubs and hotels, which generate 87 percent of its operating profit, and provide capital to invest organically and via acquisitions.

"Fuller's has for years had to navigate very high taxes, a decline in the nation's drinking and austerity which has hit pub attendance," Jonny Forsyth, Associate Director, Food & Drink at Mintel, told Reuters, adding that the brewer's traditional ale faced competition from the rise of edgier London craft beers.

(For graphic on Asahi
deal to bring much needed relief to Fuller, click

GLOBAL LONDON PRIDE?

Asahi said the addition of the Fuller's brands strengthened its position as a leader in premium beer, and that it would use its global footprint to build them across the world.

"Brexit could actually play to Asahi's advantage because it is putting pressure on ... the pound which makes exports cheaper," Forsyth said, adding that Asahi would also have the option of moving production overseas to overcome any tariffs.

Forsyth said the Fuller's deal, which is expected to close in the first half of 2019, could also kick start a year of consolidation, driven by AB InBev's competitors trying to close the gap between themselves and the world's top brewer.

Friday's sale price represents a multiple of 23.6 times core earnings of 10.6 million pounds for the year ended March and Fuller's said it would return between 55 million pounds and 69 million pounds of the proceeds to its investors.

Rothschild & Co is acting as sponsor and sole financial adviser to Fuller on the proposed sale, while Nomura advised Asahi Europe.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Anil D'Silva and Alexander Smith)

By Martinne Geller and Noor Zainab Hussain


© Reuters 2019
Stocks mentioned in the article
ChangeLast1st jan.
ANHEUSER-BUSCH INBEV -0.96% 54.78 Real-time Quote.-2.98%
ASAHI GROUP HOLDINGS, LTD. 1.14% 4341 End-of-day quote.2.29%
BASE CO., LTD. 0.33% 6070 End-of-day quote.-1.30%
BASE,INC. 3.40% 13380 End-of-day quote.37.09%
BYD COMPANY LIMITED 2.50% 254.6 End-of-day quote.25.30%
FULLER, SMITH & TURNER P.L.C. -1.27% 780 Delayed Quote.12.86%
HEINEKEN N.V. -0.88% 88.08 Real-time Quote.-2.59%
LETS HOLDINGS GROUP CO., LTD. 5.79% 7.86 End-of-day quote.1.03%
LOOK HOLDINGS INCORPORATED -1.40% 918 End-of-day quote.-4.08%
NEXT PLC -2.99% 7914 Delayed Quote.15.13%
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Financials
Sales 2020 2 018 B 19 426 M 19 426 M
Net income 2020 90 467 M 871 M 871 M
Net Debt 2020 1 835 B 17 669 M 17 669 M
P/E ratio 2020 23,6x
Yield 2020 2,44%
Capitalization 2 200 B 21 244 M 21 178 M
EV / Sales 2020 2,00x
EV / Sales 2021 1,76x
Nbr of Employees 29 327
Free-Float 98,0%
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Technical analysis trends ASAHI GROUP HOLDINGS, LTD.
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Income Statement Evolution
Consensus
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Mean consensus BUY
Number of Analysts 15
Average target price 5 003,57 JPY
Last Close Price 4 341,00 JPY
Spread / Highest target 31,3%
Spread / Average Target 15,3%
Spread / Lowest Target 2,51%
EPS Revisions
Managers and Directors
NameTitle
Akiyoshi Koji President, CEO & Representative Director
Naoki Izumiya Chairman
Atsushi Katsuki CFO, Senior MD & Senior Managing Executive Officer
Tatsuro Kosaka Independent Outside Director
Yasushi Shingai Independent Outside Director
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