CVC Capital Partners is reportedly in the running for yet another deal above the $1 billion mark, having seen two other potential mega- deals – iShares and Royal Mail – dissipate in recent months.
The London-based firm has bid $2.3 billion to buy the Central and Eastern European operations of beer maker Anheuser-Busch InBev, according to a report in the Wall Street Journal.
A CVC spokeswoman declined to confirm or deny the report.
A Barclays-run auction was initiated by Anheuser following an unsolicited approach by CVC last month, according to the report. The US newspaper also noted the assets had initially attracted interest from other private equity firms including TPG and Kohlberg Kravis Roberts.
KKR declined to comment, while TPG could not immediately be reached.
Oriental Brewery: KKR breaks the mould
In May, KKR purchased the company’s Korean subsidiary, Oriental Brewery, in a $1.8 billion deal that broke several moulds. Financed “enthusiastically” by 16 banks, according to a source familiar with the situation, the deal was structured so as to give debt-laden Anheuser the option to repurchase the assets after five years at 13 times EBIDTA. KKR, which is understood to have paid roughly 8 times EBIDTA for the assets, then syndicated the $800 million equity cheque, selling half its stake to Asian buyout firm Affinity Equity Partners, which has an established track record in Korea.
The beer conglomerate needs capital to repay debt accruing from its $52 billion acquisition of Anheuser-Busch in November 2008.
Should CVC ink a deal for the company’s Central and Eastern European operations, it would be the firm’s first fresh acquisition since closing its €11 billion Fund V in January. In April, the firm had agreed a £3 billion deal to purchase Barclays’ exchange traded fund (ETF) platform, iShares, but that fell through when Barclays later agreed to sell iShares’ parent unit, Barclays Global Investors, to BlackRock in a $13.5 billion transaction.
CVC had also reportedly been eyeing a £2 billon privatisation of the UK’s Royal Mail, but earlier this month the UK government pulled the plug on selling a stake in the postal service due to current market volatility. “When market conditions change, we will return to the issue,” Peter Mandelson, the UK business secretary who fought hard for privatisation, told the House of Lords.