Replies to post #86742 on WEALTH UNIVERSITY

[gotinearly]

Another version...Anheuser-Busch InBev (Euronext: ABI) and Kohlberg Kravis Roberts & Co. L.P. (“KKR”) announced today that they have entered into an agreement whereby Anheuser-Busch InBev will sell Oriental Brewery (“OB”), South Korea’s second largest brewery, to an affiliate of KKR, for 1.8 billion USD (equivalent to approximately 2.3 trillion KRW converted at the current spot rate of 1272.6).

Anheuser-Busch InBev will continue its relationship with OB through the exchange of best practices, granting KKR exclusive licenses to distribute certain brands in South Korea including Budweiser, Bud-Ice and Hoegaarden, and by having an ongoing interest in OB through an agreed earnout. In addition, AB InBev will have the right but not the obligation to reacquire OB within five years after closing of the transaction at pre-determined financial terms.

The divestiture of OB is part of Anheuser-Busch InBev’s ongoing de-leveraging program and allows the company to unlock shareholder value, generating proceeds that will be used to repay debt incurred as a result of InBev’s acquisition of Anheuser-Busch in November 2008.

Carlos Brito, Chief Executive Officer of Anheuser-Busch InBev, said: "This transaction allows us to unlock value for our stakeholders while preserving a mutually beneficial relationship through ongoing distribution agreements. We have great respect for OB’s business, management and employees, and we believe KKR will be a trusted owner and business partner who will contribute to the long term growth of OB and to the success of the beer market in South Korea.”

Joseph Y. Bae, Managing Partner of KKR Asia said: “We are very excited to make our first investment in South Korea and we look forward to contributing to the growth of the economy and to being a long term, constructive partner in the country. Through this investment, we hope to bring added-value to OB, the company’s employees and the South Korean beer market. OB embodies all of the key traits we look for in a company – a solid base business, strong management and appealing growth prospects.”

The transaction is subject to customary approvals under Korean law and to other customary closing conditions. The parties expect to complete the acquisition in the third quarter of 2009. The parties have entered into binding commitments for the sale of OB, and KKR has obtained committed financing for the purchase.

AB InBev expects the impact on recurring results to be immaterial and expects a non-recurring capital gain of approximately 500 million USD. The capital gain may be affected, amongst other things, by the foreign exchange rate at closing.

JP Morgan, Deutsche Bank and Lazard are acting as financial advisers to Anheuser-Busch InBev. Kim & Chang and Sullivan & Cromwell are acting as legal advisors. Goldman Sachs Group Inc., HSBC Group, Nomura Holdings Inc. and ING Group N.V. are financial advisors to KKR. Bae Kim and Lee and Simpson Thacher & Bartlett LLP are acting as legal advisors.