Anheuser-Busch InBev (AB InBev) has announced it is not going ahead with its $10 bn IPO on the Stock Exchange of Hong Kong due to ‘prevailing market conditions’ – dealing a big blow to the territory’s capital markets.
A statement issued by AB InBev reads: ‘The company is not proceeding with this transaction due to several factors, including the prevailing market conditions. The company will closely monitor market conditions as it continuously evaluates its options to enhance shareholder value, optimize the business and drive long-term growth, subject to strict financial discipline.’
The move signals a worrying trend for Hong Kong and indicates something of a contradiction in the global IPO market: on one side, the US is booming, but this is not the case for Asia or Europe, where activity is down severely as a result of concerns about economic growth and US-China trade tensions.
The IPO would have been the biggest of the year so far and, according to financial platform analytics firm Dealogic, is the third-largest withdrawn IPO on record, ranking behind the attempted $10.1 bn listing of Spanish lottery giant Sociedad Estatal de Loterías y Apuestas del Estado in 2011 and insurer AIA Group’s first $10 bn listing in Hong Kong, which was due in 2009.
AB InBev, which makes one out of every four beers sold worldwide through brands such as Budweiser, Stella Artois, Corona and Hoegaarden, had said the listing would allow it to pursue deals in Asia and reduce its debt, which stood at more than $100 bn at the end of 2018 after a number of acquisitions.
