E-Malt.com News article: Japan: Asahi Group president says the Japanese brewer was not interested in buying StarBev despite rumours

The president of Asahi Group Holdings Ltd. said April, 3 he wasn't interested in buying Czech brewer StarBev, but reiterated that the Japanese beverage maker plans to expand aggressively in high-growth markets in Asia and Oceania.

"We are not really interested," Asahi president Naoki Izumiya told Dow Jones Newswires in an interview, despite previous media reports that Asahi was interested in a deal likely worth around $3 billion for StarBev.

Shortly after the comments, Molson Coors Brewing Co. announced it would buy StarBev for $3.54 billion.

Yet Izumiya said Asahi is embarking on a major offensive to extend its global reach, feeling the pinch on its customer base at home due to a shrinking population and a weak economy.

A takeover in Europe would have given Asahi access to another fast-growing emerging market after recent acquisitions targeting Asia and Oceania. But noting the economic growth potential and population sizes of Southeast Asian nations, Izumiya said "there's no change to our policy to focus on Asia and Oceania."

He said he is cautious about the outlook for Europe, as the problems affecting the region's companies, consumers and banks "won't be resolved quickly".

"If Europe sneezes, Eastern Europe will catch a cold," Izumiya said.

Asahi has outsourced production of Asahi Super Dry - its flagship product and Japan's best-selling beer - to StarBev for the European market since 2000.

Last year, Asahi stood out with a slew of mergers and acquisitions. It bought New Zealand's Independent Liquor for $1.3 billion, its largest acquisition to date. It also made two separate soft-drink deals in Australia and New Zealand worth a total of $309 million. It bought a soft-drink maker in Malaysia for $273 million.

Asahi has ample funds in its M&A war chest, saying it is capable of procuring Y400 billion, or $4.8 billion, by 2012 and Y800 billion or $9.6 billion, by 2015 through cash flow, asset sales and borrowing.

That is a necessary step to elevate its status in the global market. Specifically, Asahi is calling for sales of Y2.0 trillion-Y2.5 trillion by 2015, of which overseas sales would make up 20%-30% through mergers and acquisitions.

But it still has a long way to go, given that sales totaled Y1.463 trillion in 2011, of which overseas sales made up a mere 6.4%.

With recent mergers and acquisitions contributing to its top line, Asahi expects sales from overseas businesses to jump 57% to Y147.7 billion in 2012, making up 9.5% of projected revenue.

That is much lower than rivals Kirin Holdings Co.'s 23%, and Suntory Holdings Ltd.'s 21%.

Other than StarBev, Asahi's presence in Europe has so far been limited to local production of Super Dry to brewers in the U.K. and Russia. Sales of the brand in Europe account for less than 1% of those in Japan.


04 April, 2012