* Initial sale for $2.23 bln, could rise to $3.03 bln
* AB InBev passes targeted $7 bln of divestments
* Transaction to close by Jan 2010
* Third asset sale to private equity
* AB InBev shares rise 0.5 percent
(Adds further details, share price)
By Philip Blenkinsop
BRUSSELS, Oct 15 (Reuters) - Anheuser-Busch InBev <ABI.BR>,
agreed to sell breweries in nine eastern European countries to
CVC Capital Partners on Thursday for an initial $2.23 billion,
passing its target for divestments since its merger a year ago.
The sale is the third by the world's largest brewer to a
private equity company, after KKR's purchase of South Korea's
Oriental Brewery and Blackstone LP's <BX.N> of its U.S. theme
parks, made possible by improved capital and equity markets.
AB InBev and CVC said in a statement that the price tag
could rise to $3.03 billion depending on CVC's return on
investment, while AB InBev has the right of first offer to
reaquire the business should CVC decide to sell in the future.
AB InBev has therefore pushed past the $7 billion goal it
had set for divestments to help pay for InBev's $52 billion
takeover of U.S. rival Anheuser-Busch completed last November.
The brewer of Budweiser, Stella Artois and Beck's has now
actually raised a potential $9.5 billion after sales of assets
in South Korea, China, Scotland and Ireland as well as packaging
and theme park businesses in the United States.
AB InBev, which took the number one spot back from SABMiller
Plc <SAB.L> last year, said CVC would be acquiring its
operations in Bosnia-Herzegovina, Bulgaria, Croatia, Czech
Republic, Hungary, Montenegro, Romania, Serbia and Slovakia.
Analysts said the business was put up for sale as AB InBev
did not have key positions in any large beer markets, while
competition in some of these markets from SABMiller and Heineken
<HEIN.AS> meant a bid from the world's second and third largest
brewers was unlikely for anti-trust reasons.
AB InBev is the leading brewer by volume in Serbia, Croatia
and Montenegro, number two in the Czech Republic to SABMiller,
number two in Bulgaria to Heineken and number three in Hungary
and Romania behind Heineken and SABMiller.
"We are pleased to announce this transaction which enables
us to exceed our stated commitment to achieve $7 billion in
divestitures," said AB InBev Chief Executive Carlos Brito.
AB InBev shares edged 0.5 percent higher to 33.24 euros by
0815 GMT.
As part of the transaction, CVC, which owns over 50
companies worldwide from motor racing's Formula One to luggage
group Samsonite, had raised $1 billion of senior debt financing
from a group of banks.
The deal, which was expected to close by January 2010, is
comprised of a $1.618 billion cash payment, a $448 million
unsecured deferred payment obligation with a six-year maturity
and interest of 8 to 15 percent and $165 million in minority
interests, assuming market value at Wednesday's close.
Barclays Capital and Lazard acted as financial advisers to
AB InBev and Clifford Chance as legal adviser. Freshfields acted
as legal counsel to CVC.
(Additional reporting by David Jones; Editing by Hans Peters
and Jon Loades-Carter)
