KKR near deal to buy S. Korean OB for $1.8 billion

SEOUL (Reuters) - U.S. private equity firm Kohlberg Kravis Roberts & Co is finalizing an agreement to buy Anheuser-Busch InBev NV's INTB.BR South Korean brewer Oriental Brewery Co (OB) for about $1.8 billion, sources familiar with the situation said.

The acquisition would give KKR a foray into major South Korean assets, where lower valuations are attracting private equity houses.

An OB official told Reuters on Monday that a deal would signed this week, which one source said on Sunday was expected to be worth about $1.8 billion.

"Our knowledge is that an agreement will be signed with KKR either on May 6 or 7," the OB official said. "A group of KKR officials have recently toured OB plants," he added. He declined to be named because he was not authorized to speak to the media.

Selling unlisted OB would give AB-InBev around a $1 billion profit. The world's biggest brewer reportedly spent a combined 1.15 trillion won ($884 million) to secure full ownership of the No.2 beer maker in South Korea since 1998, when it first bought a stake.

AB-InBev is looking to sell non-core assets and repay debt. It had valued OB at more than $2 billion, according to bankers.

A Wall Street Journal report, citing unidentified people familiar with the matter, said about 45 percent of the purchase price would come from KKR, with much of the rest coming from leveraged loans and seller financing.

The Journal said AB InBev would provide $300 million worth of financing for the deal, citing one unnamed source.

Nomura Holdings, HSBC Holdings, JP Morgan Chase & Co and Standard Chartered would underwrite four-fifths of the leveraged loans needed for the deal, according to the online Journal story, which cited another unnamed source.