NEW YORK/FRANKFURT — Anheuser-Busch InBev, the world’s largest brewer, is exploring options for its packaging activities as it streamlines its portfolio and focuses on its core beverage business, sources close to the matter said.
The company is working with Deutsche Bank on a deal for its U.S.-based canning activities, which A-B InBev inherited when it bought Anheuser-Busch in 2008, the people said.
Deutsche Bank has been hired to explore a sale of a minority stake or a joint venture for A-B InBev’s North American bottling and canning activities that could be worth $5 billion to $6 billion, one of the people said, adding that it was not aiming for an outright sale.
The $52 billion Anheuser-Busch InBev merger spurred a series of divestments, notably of nonbeer activities, such as its theme parks. St Louis-based Metal Container Corp. was discussed as a possible asset for sale at the time, but instead it was kept.
Now, after its $100 billion-plus purchase of nearest rival SABMiller in 2016, A-B InBev is again looking to reduce its debt, selling its Australian business and beer brands in Europe and floating part of its Asian operations.
Anheuser-Busch InBev and Deutsche Bank declined to comment.
Anheuser-Busch InBev last month issued a profit warning and posted weaker-than-expected third-quarter earnings growth sparked by reduced demand for its beer in Brazil and South Korea.
The cautious outlook came after main rival Heineken trimmed its 2019 guidance following an unexpected dip in sales in the Americas.
Anheuser-Busch InBev has already been sounding out interest from private equity firms for the packaging operations, one of the people close to the matter said.
Another source said that he expected the business to be valued at around 11 times earnings before interest, tax, depreciation and amortization.
“The main question is what value is attached to the supply contract that any buyer would seal with A-B InBev,” one of the people said. While the packaging business makes bottles for other parties as well, A-B InBev is by far its largest customer.
Metal Container Corp., part of the Anheuser-Busch Packaging Group subsidiary, supplies more than 45% of A-B’s domestic cans and 55% of its lids, according to the company. It operates five can and two lid manufacturing plants in the U.S. One of the plants is in Arnold.