AB InBev Asia cancels world’s largest IPO of 2019

Anheuser-Busch InBev (ABI.BR) said on Friday it will not proceed with the initial public offering of its Asia Pacific unit, Budweiser Brewing Company APAC Ltd (1876.HK), on the Hong Kong Stock Exchange.

The company said the decision was due to “several factors, including the prevailing market conditions.”

It had been set to be world’s biggest listing of 2019. The company had been seeking to raise up to…

$9.8 billion.

The move, against the backdrop of a protracted U.S.-China trade war, set a downbeat tone for large Hong Kong listings, seen as a barometer for future large share sales, such as Alibaba’s (BABA.N) Hong Kong listing.

Budweiser APAC, whose portfolio of more than 50 beer brands includes Stella Artois and Corona, received offers for shares within its targeted range from hedge funds and private wealth managers but some large long-only U.S. investors, which are often prioritized in an IPO, offered below the HK$40 per share level, other people familiar with the matter said.

IPOs on Hong Kong exchanges are only able to price up to 10% below the target range without regulatory approval if the risk is flagged in its prospectus.

This was not sufficiently highlighted in the Budweiser filing so AB InBev held firm on the HK$40 price, meaning some U.S. investors trimmed the size of their orders, sources said.

The company’s executives and representatives from the deal’s co-sponsors, JPMorgan (JPM.N) and Morgan Stanley (MS.N), met in New York to discuss pricing after the books closed on Thursday.

People familiar with the issue said it was struggling to…

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