Asahi Eyes Independent Liquor, Needs To Secure Higher-Growth Assets

Japanese brewer Asahi is rumoured to be in the final stage of negotiations to acquire New Zealand alcoholic drinks company Independent Liquor from private equity owners Unitas and Pacific Equity Partners. From Asahi's perspective, an acquisition of Independent Liquor brings the prospect of stable earnings. However, given the economic and demand sluggishness in its domestic market, we believe it would be more beneficial for the Japanese brewer to target higher-growth assets for its portfolio. From a broader perspective, Asahi's rumoured acquisition reinforces our view that the Japanese brewer may be reluctant to acquire Foster's Group's beer unit Carlton United Brewers (CUB) due to the lack of financial firepower and the high acquisition cost of the beer unit.

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