|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||72.01 - 72.71|
|52 Week Range||56.32 - 92.71|
|Beta (3Y Monthly)||0.84|
|PE Ratio (TTM)||15.37|
|Earnings Date||Oct 25, 2019|
|Forward Dividend & Yield||1.80 (2.49%)|
|1y Target Est||99.21|
Hexo (NYSE:HEXO) stock is nearing the danger zone. Since Nov. 7, the HEXO stock price is down 10%. That's the continuation of an ongoing slide. In the last six months, the stock is down over 70%.Source: Shutterstock Some of this drop is due to investors' ongoing retreat from cannabis stocks. HEXO for the most part has not been tainted by a particular scandal. However, like all the cannabis stocks, they have yet to show a profit. And with full legalization still some time away in the U.S. (not to mention the unknowns regarding regulation), investors are backing away from this industry.However, a greater concern regarding HEXO is investors struggling to understand exactly what the company is and where it fits in the cannabis sector. And that is leading to the larger question of whether or not the company will be acquired. As I look at HEXO, I see acquisition as not only probable, but likely.InvestorPlace - Stock Market News, Stock Advice & Trading Tips HEXO Is the Goldilocks of the Cannabis SectorThe term "Goldilocks" is colloquially used to describe an economy that is not too hot and too cold. If you'll indulge me, I'm borrowing the Goldilocks word to describe HEXO. I believe that the company is in an interesting space in the cannabis sector. It's not large enough to compete with the big producers like Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB). However, the stock is not so small as to be irrelevant. * 10 Cheap Stocks to Buy Under $10 The cannabis sector is about to embark on a consolidation phase. As the cannabis market emerged, many companies popped up. Many have and will fail. Others, like Canopy and Aurora have a lot of cash that ensure they will be part of the next stage of the business cycle. HEXO Is Not a Significant ProducerHEXO is not a major producer of cannabis. And frankly, their attempt to increase their production capacity is causing problems to the company's balance sheet. During their 2019 fiscal year, the company purchased 25 million CAD of dried cannabis to keep up with demand. The company subsequently wrote down that purchase to 8.1 million CAD.Write-downs like that are one reason that the company continues to report steep losses even as revenue is slowing. For example, in their most recent quarter, HEXO was expecting net revenue to come in around 14 million CAD to 18 million CAD after accounting for returns and retroactive inventory adjustments. HEXO Has Some Compelling PartnershipsBut HEXO has never been a major cannabis producer. And they haven't wanted to be. Instead, HEXO has focused on trying to form partnerships to get products to market. This is presenting two opportunities for HEXO stock to grow in the short term. But it's these same opportunities that make HEXO a desirable addition for another cannabis company.HEXO has a joint venture with Molson Coors Brewing (NYSE:TAP). The venture, called Truss has a partnership to produce Flow Glow, which is essentially cannabis-infused water (albeit in miniscule amounts). But HEXO is not alone in this space. Tilray (NASDAQ:TLRY) has a partnership with Anheuser-Busch (NYSE:BUD) and Canopy has its much publicized partnership with Constellation Brands (NYSE:STZ).And in May 2019, HEXO made an acquisition of its own with its 263 million CAD purchase of Newstrike Brands. Newstrike is the parent company for Up Cannabis, a brand that is gaining traction in Canada and could provide some growth. One of the reasons HEXO made this deal was the opportunity to increase its production space. * 7 Food Stocks to Buy Now But here again, chasing production is a double-edged sword. As I pointed out above, trying to increase their cannabis supply is part of what's leading to write-downs and losses. Those losses are beating up the stock price. In fact, the 1.8 million square feet of cultivation space that HEXO gained from the Newstrike deal is currently shuttered as part of their cost cutting plan. HEXO Has a Limited Path to Growth on Its Own MeritsHEXO is an intriguing cannabis company because it looks like it's at least attempting to get its balance sheet right. But being financially responsible is not giving it the opportunity to be a major player on the production side. And it may find that there just isn't a niche in which they can find a truly competitive advantage.But they are not insignificant, and they may very well prove to be a takeover target as the industry begins to consolidate. As recently as November 2018, Hexo CEO Sebastien St-Louis announced the company was on sale for the right price. However, with HEXO stock sinking below the $2 mark, there may be no time like the present for companies who are looking to buy the cannabis firm.As of this writing, Chris Markoch did not have an interest in the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Stocks to Buy Under $10 * These 10 Stocks to Buy Make the Perfect 'Retirement' Portfolio * 5 Streaming Stocks to Buy for Huge Upside Over the Next Decade The post HEXO Stock Is Primed for an Acquisition Now appeared first on InvestorPlace.
WeissLaw LLP is investigating possible breaches of fiduciary duty and other violations of law by the Board of Directors of Craft Brew Alliance, Inc. ("BREW" or the "Company") (NASDAQ: BREW) in connection with the proposed acquisition of the Company by Anheuser-Busch InBev SA/NV ("BUD") (NYSE: BUD). Under the terms of the acquisition agreement, BREW shareholders will receive $16.50 for each BREW share they own.
In the ad, the "Black-ish" actor becomes the head coach of the Los Angeles Lakers after realizing the importance of staying hydrated while drinking a Budweiser. Unfortunately for the actor in the 2-minute commercial spot, his transformation to NBA coach was just a dream.
Anheuser-Busch InBev SA , the world’s largest brewer, found a way to buy some beers it knows well — including the Kona Brewing Co. and Redhook Brewery — for a cheaper price than expected.
(Bloomberg) -- In the four years since it was founded, Convoy Inc. has assembled a lineup of big-name investors that includes Bill Gates, Jeff Bezos and Marc Benioff. It’s adding one more to the list: Al Gore.The former U.S. vice president’s sustainability-focused investing fund, Generation Investment Management LLP, led a $400 million funding round for Convoy, which makes software to connect freight shippers with truck drivers. T. Rowe Price Group Inc. co-led the investment with Gore’s firm, Convoy said Wednesday. The deal values the startup at $2.75 billion.Convoy is often described as “Uber for trucking”—a moniker that took hold before Uber Technologies Inc. set up a competing business. Uber has committed to hire 2,000 people to expand freight operations in Chicago. Another rival business in the United Arab Emirates, Trukker, said Tuesday it received a $23 million investment led by a Saudi Arabian venture capital fund.A big part of Convoy’s pitch is that it can improve the trucking business by making it more efficient, both financially and environmentally. Transportation is the largest source of U.S. emissions today, and heavy-duty trucks represent about 13% of those emissions. Convoy’s service is designed to eliminate unnecessary driving by ensuring trucks can get loads on each trip. The business isn’t yet profitable, but Dan Lewis, the chief executive officer, has said it will be eventually.Customers include Procter & Gamble Co. and Anheuser-Busch InBev NV. Among the investors in the new funding round are Alphabet Inc.’s CapitalG, Baillie Gifford, Durable Capital Partners, Fidelity Investments and Lone Pine Capital. The new funds are expected to help the company accelerate its expansion and fend off competition from upstarts, as well as the likes of J.B. Hunt Transport Services Inc.\--With assistance from Dina Bass and Thomas Black.To contact the reporter on this story: Emily Chasan in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Mark Milian at email@example.com, Anne VanderMeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Craft Brew Alliance (NASDAQ: BREW) shares have more than doubled on Tuesday after Anheuser-Busch (NYSE: BUD) agreed to purchase the remaining shares of the company it does not already own in a merger transaction for $16.50 per share in cash. Anheuser-Busch already owns a 31.2% stake in Craft Brew Alliance. “Anheuser-Busch has a long track record of working with its craft partners to help make the U.S. beer category stronger and more vibrant,” said Michel Doukeris, CEO of Anheuser-Busch.
Benzinga Pro's Stocks To Watch For Tuesday Anheuser-Busch InBev (BUD) - The company will purchase the remaining stake in Craft Brew Alliance (BREW) it does not already own. The deal is valued at $16.50 ...
STOCKSTOWATCHTODAY BLOG Trading on Tuesday began quietly as investors awaited a lunchtime speech from President Donald Trump on trade policy. After the violence in Hong Kong that sparked Monday’s stock decline, global equity markets were a little higher in overseas trading.
The deal, reported to be for $321 million, reverses a decision from August when the beer giant passed on an opportunity to acquire the remaining shares of the Portland-based craft brewer.
Brewer Anheuser-Busch Inbev NV will buy the rest of Craft Brew Alliance that it does not own in a deal valuing the Portland-based brewing company at about $321 million, the two companies said on Monday. Shares of Craft Brew Alliance soared 122.6% to $16.32 after the bell, hovering near the offer price of $16.50 in cash. The deal is a reversal in stance by the world's largest brewer, which owns 31.2% stake in Craft Brew and had said in August it would not buy out the company.
Shares of Craft Brew Alliance soared 122.6% to $16.32 after the bell, hovering near the offer price of $16.50 in cash. The deal is a reversal in stance by the world's largest brewer, which owns 31.2% stake in Craft Brew and had said in August it would not buy out the company. Craft Brew's portfolio of regional breweries and lifestyle brands is an addition to Anheuser-Busch and will help fuel the growth of craft beer category in the competitive beer industry in the United States, Anheuser-Busch said.
Anheuser-Busch InBev SA will continue the buying frenzy for craft beers by attempting to purchase the rest of publicly traded Craft Brew Alliance Inc. for $16.50 a share. Craft Brew Alliance closed Monday's trading session at $7.33 a share, but the stock shot up more than 120% in after-hours trading to more closely resemble to purchase price. Craft Brew Alliance is known for its Kona Brewing, Widmer Brothers and Redhook Brewery brands, among others. Anheuser-Busch, the maker of Budweiser and other mass-market beers, has moved heavily into craft beers in recent years, and previously made a distribution deal with Craft Brew Alliance. Part of that deal included an option to buy the remaining shares, but Anheuser-Busch allowed the deadline for that deal to pass without exercising the original option, instead paying a $20 million incentive payment. The large beer company already owned a stake of more than 31% in Craft Brew, according to FactSet, and will seek to buy the rest of the shares with cash.
Kraft Heinz (NASDAQ:KHC) reported third-quarter results on Oct. 31 that were mediocre. However, it did manage to report earnings per share of 69 cents, 15 cents higher than analysts' average estimate. Kraft Heinz stock jumped more than 13% on the positive surprise.Source: Casimiro PT / Shutterstock.com InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs a result of the better-than-expected earnings, my fellow InvestorPlace columnist, Dana Blankenhorn, recommended that anyone who bought KHC stock before August or in September or later ought to give the relatively new CEO time to revitalize its portfolio. Those are wise words because KHC stock still has an attractive 4.9% dividend yield that investors can enjoy until the company gets its act together. In February, I came up with seven reasons why Kraft Heinz stock is a contrarian buy. At the time it was trading around the same price where it is now. * 7 Large-Cap Stocks to Give a Wide Berth However, a quick review of some of my reasons for buying KHC stock suggests they haven't changed too much. Warren BuffettWarren Buffett has lost billions on KHC stock. It's got to be one of his biggest mistakes in an illustrious career. He's even admitted as much, saying Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) paid too much for the shares. I was hopeful that Buffett would buy out his 3G partners or at least up his stake in the company, but it's clear that he's fearful of compounding an already big mistake with another one. If Buffett raises his stake or acquires 3G, KHC stock price would no doubt get a boost. But that's clearly not in the cards. A New CEOI argued in February that Kraft Heinz needed a new CEO with real packaged goods experience. Former CEO Bernardo Hees was a 3G guy. He'd been a 3G guy his entire career. The company needed somebody who was less attached to one of its primary owners. At the end of April, Kraft Heinz hired Miguel Patricio, the former chief marketing officer of Anheuser-Busch InBev (NYSE:BUD). A marketing person, not a bean counter, Patricio will be more passionate about the company's products. "We think this change at the helm is a good sign for investors because it demonstrates that the company is very serious about pivoting its priorities toward growth rather than just cost cutting," Credit Suisse wrote. I couldn't agree more. However, it's important to remember that Patricio was hired by 3G. It's not like he was recruited by a major headhunting firm that found him to be the best person for the job. Kraft Heinz Chairman Alex Behring, one of 3G's founding partners, approached him about the CEO role early in 2019. "He's completely a 3G cultural artifact," an executive at AB InBev during Patricio's tenure there is reported to have stated anonymously about the hiring. "Going from Bernardo to him is not a change, it's more like continuity."I'm on the fence on this one. Marketing people always want to spend money if they can. If the board lets him do so, and that's a big if, he'll be different from his predecessors.Patricio needs more than one quarter to demonstrate that this is the case. His affiliation with 3G does worry me. DivestituresKraft Heinz finished Q3 with total debt of $30.7 billion, $400 million less than its debt at the end of December. Its total debt is 77% of its market cap. That compares to 58% for AT&T (NYSE:T), the poster child for excessive debt. As I mentioned in February, Kraft Heinz has got to divest some of its brands so that it can strengthen its balance sheet while concentrating its future focus on its most influential brands. KHC has looked to sell multiple brands, but in some cases, it's faced difficulty getting a reasonable price for them, while in others the for- sale sign has been taken down until the CEO's had some time to consider what stays and what goes. On Kraft Heinz's website, the company says it has 25 global brands, including Kraft, Heinz, and Oscar Meyer. The company could sell half of its brands and still have too many. I don't relish the CEO's job. The Bottom Line on Kraft Heinz StockI consider the gains of KHC stock price following the earnings a dead-cat bounce, relief rally. Kraft Heinz's business in the U.S. continues to shrink. Its brands have become tired and old. If not for KHC's 4.9% dividend yield, I'd find it very hard to own KHC stock right now. Patricio took the job on July 1. He's had just four months in the position. I'd wait until the company reports its Q4 results in February before seriously considering KHC stock. And then, I wouldn't focus so much on the numbers, but on what the CEO is saying about the company's business.It takes a year or more for a new CEO to get comfortable in the job. We're still a long way off from that point. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Large-Cap Stocks to Give a Wide Berth * 7 Potential New Stocks That Should Not Go Public * 5 Chinese Stocks to Buy Surging Higher The post Investors Should Be Cautious About Buying Kraft Heinz Stock in the $30sÂ appeared first on InvestorPlace.
Shares of Craft Brew Alliance, Inc. , more than doubled in after-hours trading Monday after Anheuser-Busch InBev agreed to buy the remaining shares it doesn't already own for $16.50 each. Shares of Craft Brew rose $8.
Brewers and producers of other canned drinks are continuing to lobby this fall for the government to take a greater role in aluminum pricing, as a benchmark for the metal hasn’t fallen that much from last year’s tariffs-induced high.
German immigrant Adolph Coors founds the Golden Brewery with business partner Jacob Schueler in an old tannery, producing the first bottles of Golden Lager just one year later. 1890s and 1900s — Coors makes several improvements to the Coors plant property, including the rerouting of Clear Creek, from which the brewery takes its water, and the construction of an electric power plant. 1916 — After Colorado launches into Prohibition four years ahead of the rest of the country, the brewery survives by making malted milk and ceramics, among other products.
Take sparkling water, some cheap alcohol usually distilled from sugar, add some fruit flavouring, stick it in a brightly coloured can — and you have a new US drinks craze, “spiked seltzer”. The undisputed leader in this market is White Claw, a brand owned by private Canadian company Mark Anthony Brands, which had an unexpected boost at the start of the summer when a mocking YouTube video by comedian Trevor Wallace went viral.
Kraft Heinz (NASDAQ:KHC) beat earnings estimates and the stock rose 13% on Halloween. Earnings of $899 million, or 69 cents per share, sailed by estimates of 61 cents. But sales were down nearly 5% from a year earlier, at $6.1 billion.Source: Casimiro PT / Shutterstock.com There's more to the story. Even with its recent gains the stock is down 24% in 2019, as economist Bernardo Hees was moved out in favor of Portuguese Miguel Patricio. The September quarter was the first under his leadership and, while earnings beat estimates, the company missed on revenues.The question for investors as November dawns is whether the numbers represent a dead cat bounce or a buying opportunity.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Dead Cat Bounce?Kraft Heinz was written off as a failure this summer. This came after taking a $15.4 billion write-down on the Kraft and Oscar Meyer brands and a dividend cut. Oh, and the company also received a U.S. Securities and Exchange Commission investigation regarding its accounting.The stock bottomed in August at about $25 per share. Even with the dividend cut the shares yield nearly 5% to new investors. In August the yield was as high as 6.4%.Since then the stock has begun a recovery under Patricio, who was known as an innovative marketer at his previous posting, Anheuser-Bush InBev (NYSE:BUD).The legendary Warren Buffett of Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) helped put Kraft Heinz together, along with Brazilian investors 3G Capital, in 2015. Berkshire still held over one-quarter of the company's stock in June, and it was the firm's sixth-largest holding.But Kraft Heinz has proven to be one of Buffett's biggest mistakes. He blames himself for paying too much for Kraft in 2013, but 3G should shoulder more of the blame. The company is full of stale shelf-stable brands consumers have learned to shun. These include not just ketchup and processed cheese but Oscar Meyer bologna, Planter's peanuts and Maxwell House coffee.The original plan was for 3G's "zero-based budgeting" to drive down costs, hold up sales and wring out more profit. But 2019 sales are on pace to be 10% below those of 2016, and the company barely earns its lower dividend.Does Patricio have a more cunning plan? Is the KHC Cat Still Alive?Despite the company's troubles, there's still that yield. At a time when the 30-year U.S. Treasury is worth under 2.4%, you're getting nearly 5% on your money with Kraft Heinz stock.Analysts expect Patricio to pare down the product portfolio. This would mean selling Velveeta, Planter's and Maxwell House in favor of new brands and Primal Kitchen, a healthy foods brand acquired last year.Patricio is known as a marketer and may have other ideas. So far he has decided to keep Plasmon, an Italian baby food company. He also approved funding for a technology startup called Flowhub, best known for its work in cannabis. The Bottom Line on Kraft StockFor some, the September revenue miss was the last straw. Patricio said it represented "good progress," but couldn't be more specific.The impatient money thinks it's time to take profits. But you only have profits if you bought after August.That's why I think that if you're still stuck in this dog, you should hang tight. Taking out last year's write-off and the dividend means the stock can't fall much further, assuming the new dividend is maintained.I wouldn't put new money into Kraft Heinz stock but I wouldn't be taking my losses now, either. If Patricio is as good as his reputation, you and Buffett might still get out with your shirts.Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time available now at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Buy-and-Hold Stocks to Play Investing's Biggest Trends * 7 Stocks to Buy in November * 5 Strong Buy Stocks Under $5 With Massive Upside Potential The post New CEO Could Save Kraft Heinz Stock and KHC's Shrinking Dividend appeared first on InvestorPlace.
Ambev (NYSE:ABEV) stock presents a conundrum for investors. The long-term drop in the equity and the dividend may point to a potential bargain. However, political and business headwinds in Brazil point to significant challenges. Deciding whether to buy Ambev stock, investors must weigh these benefits against both the risk and their risk tolerance.Source: Anton Garin / Shutterstock.com Most Americans have few reasons to know Ambev. The Sao Paulo-based brewery is a subsidiary of Interbrew International, a subsidiary of Anheuser-Busch InBev (NYSE:BUD). For most residents of the U.S., their familiarity with the company likely revolves around Labatt Blue, a familiar brand for those who visit Canada. Outside of the Canadian connection, Ambev operates in Latin America, primarily in its home market of Brazil. 3 Notable Risks of Ambev StockThis unfamiliarity with AmBev stock likely extends to its significant risks. For one, Ambev faces ongoing political turmoil in its home country. The company is currently contending with an antitrust complaint filed by competitors in Brazil. A group of 110 resellers and distributors alleges that ABEV has used its market position to push abusive commercial policies. If found guilty, AmBev could face a fine ranging from 0.1% to 20% of its revenue.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAlso, in 2015, Ambev was tied to the Operation Car Wash corruption scandal in Brazil. However, Ambev products faced a massive tax increase that year, despite charges that the firm made "inappropriate payments" to two former Brazilian presidents to prevent the hike. However, the increase went into effect despite the allegation. To Vince Martin's point, that would either point to the company's innocence or highlight how poorly the firm has mastered the art of bribery. * 7 Stocks to Buy in November Secondly, Vince Martin also makes another great point about the Brazil beer market itself. Brazil was the only one of the company's regions to decline in the first six months of the year. It also accounts for more than half of company profits. Many blame an emerging craft beer scene amid overall growth in the beer market. However, this may have begun to recover as the Brazil region saw modest revenue growth in the third quarter.Third, ABEV stock has experienced a downtrend since peaking at more than $9 per share in early 2013. After recovering to the $7.25 per share range in March 2018, the stock tanked, falling below $4 per share by the end of that year. It has spent about 18 months trading in a range and sells for around $4.30 per share as of the time of this writing.These risks increase the uncertainty surrounding ABEV stock. As of now, the company supports a forward price-earnings (PE) ratio of around 20.5. This might seem high for a company expected to post no profit growth this year and a 10.5% earnings increase in 2020. 3 Reasons to Buy ABEVHowever, ABEV stock offers some reward for the risks. First, the current dividend yield stands at 5.2%, assuming the expected 24 cent per share gets paid. The company pays a varied dividend on a non-consistent basis. It seems especially inconsistent as it has not yet made a payout in 2019.Secondly, the aforementioned 20.5 forward PE comes in much lower than the multiple for Constellation Brands (NYSE:STZ) and Diageo (NYSE:DEO). It also offers a higher dividend yield than Molson Coors (NYSE:TAP). While not the cheapest alcoholic beverage equity, it offers some unique benefits for investors willing to invest.Third, revenue also continues to hold up well. In the recent quarterly report, profits fell by 15.8% year-over-year due to higher income taxes. However, overall revenue increased by 5.9%. The only region to experience a decline was Canada, where they face more intense competition from craft beer. It also saw its highest growth in the Latin America south region, which prospers despite the economic turmoil in Argentina. Should I Buy ABEV Stock?Investors have good reasons to both avoid or take a chance on ABEV stock. The risks associated with the legal and business environment in Brazil may give investors second thoughts about buying at current levels. However, it has offered a generous, if volatile dividend. It also trades well compared to other alcoholic beverage peers. Growth in some regions also points to its resilience.As customers and Ambev adapt to the higher taxes, I expect profit growth to resume. Moreover, given the revenue growth, I expect the downward move in ABEV stock to break at some point. For those wanting a beverage stock and do not mind the risk, they should consider Ambev stock.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Buy-and-Hold Stocks to Play Investing's Biggest Trends * 7 Stocks to Buy in November * 5 Strong Buy Stocks Under $5 With Massive Upside Potential The post Ambev Stock: 3 Significant Risks, 3 Reasons to Buy Anyway appeared first on InvestorPlace.
(Bloomberg) -- The biggest dealmaker in Japan this year has one thing on his mind: beer, and then more beer -- more than $20 billion of it in the past four years.Never mind that people around the globe are drinking less, with consumption expected to show little to no growth in the coming years, or that other brewers are trying to diversify out of the market. Asahi Group Holdings Ltd. Chief Executive Officer Akiyoshi Koji is doubling down on beer as a survival strategy.“We are expanding with the goal of being No. 1 for the premium beer segment in every geographic area we’re doing business,” Koji, 67, said in an interview. “The world is our market.” The CEO’s other obsession is to make Super Dry, which debuted in the late 80s and helped turn Asahi into Japan’s top brewer, into a global beer brand.While other big brewers are moving into high-growth regions such as China and Southeast Asia, or exploring potentially lucrative businesses like cannabis-related products, Asahi has been in acquisition mode for beer in all corners of the globe, most recently in Europe and Australia.Koji has been the driving force behind more than $20 billion in acquisitions -- including his biggest-ever deal in July, the $11 billion purchase of Melbourne-based brewer Carlton & United Breweries -- in the past four years. The deals have almost doubled Asahi’s value and vaulted it into the top ranks of the world’s biggest beer makers in less than five years.The buying spree has sparked skepticism from analysts. In two of its deals with Anheuser-Busch InBev NV -- central and eastern European assets in 2017 and Australian labels including Victoria Bitter earlier this year -- it paid about 15 times Ebitda, according to Bloomberg calculations. The median for nine brewery acquisitions announced worldwide in the past five years is only 10 times Ebitda.Koji, who joined Asahi 44 years ago as a rank-and-file salaryman, often cites Heineken NV as the kind of global brewer Asahi aspires to be. But Heineken pushed into global markets decades ago, when appetite was growing for imported and exotic beers. Now, younger drinkers are choosing local craft brews and lower-calorie drinks, or even opting for cannabis-infused beverages for relaxation with no hangovers. That’s why Euromonitor predicts that beer consumption volume will grow only around 1.4% annually on average in the next five years.“The vast majority of mature markets are reaching the limits of growth potential,” said Spiros Malandrakis, head of research for alcoholic drinks at Euromonitor. “I think the era of global mega brands that can maintain brand equity across long periods of time will die with the millennial generation.”Koji says that the premium segment — higher-priced beers — still has room to grow compared with the broader industry. Consolidation is the only way to expand in a mature global beer industry, he argued, noting that what Asahi paid for Carlton & United “was not that expensive” given population growth on the continent.One reason why Asahi has been able to snap up so many storied beer brands is the CEO’s willingness to make quick decisions. He’s also built up rapport with AB InBev chief Carlos Brito, who has been selling off assets to pay down debt.Koji first asked to buy the Australian brands in a meeting earlier this year, but Brito didn’t commit at the time, as the Belgian brewer was preparing a mega-IPO of its Asian operations. When that plan fell apart in July, Koji spied an opening and immediately contacted Brito. After a weekend and a week of meetings and nightly calls, they finalized a deal that stunned markets, as well as AB InBev’s own bankers.Despite the dramatic dealmaking, Koji remains fairly low-key. His meal of choice before important meetings is “shogayaki,” a pork-and-ginger stir fry found in cafeterias for less than $10. But his bold moves have raised eyebrows in Japan’s staid corporate world.“Someone who’s making these very, very big decisions for acquisitions is certainly not standard for Japan Inc.,” said Christina Ahmadjian, a business professor at Hitotsubashi University who is an outside director on Asahi’s board.Asahi took on a 1.2 trillion yen bridge loan and issued 200 billion yen worth of shares to pay for the suite of Australian brands. The Japanese brewer, which was already on the hook for about 1 trillion yen in interest-bearing debt, is hoping that cash from that newly-acquired business will help pay down liabilities.The company is also facing pressure in its home market, where higher margins generates a steady cash flow it relies on. Rival Kirin Holdings Co. has been seeking to unseat the market leader by putting out inventive brews with a premium twist and offering craft beers. “The domestic business needs a fundamental rethink if they’re really going to deliver value,” said Euan McLeish, an analyst at Sanford C. Bernstein & Co.Koji contends that Asahi can grow at home and abroad. Its focus in Japan is to improve profitability, rather than try to boost consumption in a country where a declining population translates into fewer drinkers.He seems untroubled by the doubters and investors are so far rewarding his resolve. Asahi shares are up 27% this year, compared to a 12% gain in the TOPIX.“He’s very stoic,” UBS Securities analyst Satsuki Kawasaki said. “He’s taken on the CEO position with the conviction that he will exit if he doesn’t produce results.”To contact the reporters on this story: Lisa Du in Tokyo at email@example.com;Grace Huang in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Rachel Chang at email@example.com, Reed StevensonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Anheuser-Busch In-Bev is buying the rest of Craft Brew Alliance that it doesn’t already own for roughly $321 million. Yahoo Finance’s AKiko Fujita and Brian Cheung discuss on The Ticker