LONDON/SINGAPORE Japan's Asahi Group Holdings (2502.T) and Thai Beverage (TBEV.SI) have made it through to the final stages of an auction to buy SABMiller's SAB.L Peroni and Grolsch beer brands, several sources with knowledge of the matter said on Thursday. Private equity firms PAI Partners and Bain Capital have also moved to the next round of bidding, the sources said, speaking on condition of anonymity.
European buyout fund EQT emerged as the fifth bidder to be shortlisted by the seller, Anheuser-Busch InBev (ABI.BR), two of the sources said.
Peroni and Grolsch are valued at more than 2 billion euros ($2.2 billion), but the two Asian brewers could offer up to 3 billion euros to snap up the assets, one of the sources said.
The sale, which the sources said AB InBev (ABI.BR) wants to wrap up by the beginning of March, is aimed at easing anti-trust approval for AB InBev's $100 billion-plus takeover of SABMiller.
The Belgian brewer faces paying SABMiller a $3 billion break-up fee if the deal fails.
Binding offers are expected in mid February, the sources said, with one adding that some of the parties have been given a chance to sweeten their offers by a deadline of next week.
Reuters reported on Jan. 15 that Spain's Damm and buyout funds KKR and BC Partners had submitted non-binding bids for the brands.
AB InBev, SABMiller, Asahi, ThaiBev, PAI, Bain Capital and EQT declined to comment.
The Asian suitors could justify paying a higher price, one source said, based on the cost benefits they would extract and the ability to use the brands to boost their international sales.
At 3 billion euros, Peroni and Grolsch would be valued at up to 15 times their combined earnings before interest, taxes, depreciation and amortization (EBITDA) of 180-200 million euros.
Nirgunan Tiruchelvam, a director in the research unit at Religare Capital Markets, estimated that Asian consumer companies would make a return on investment of about 8 percent from the acquisition of Peroni and Grolsch, while benefiting from the low cost of capital in Europe which is about 2 percent.
"You can borrow so cheaply in Europe that it would work in your favor," Tiruchelvam said.
Thai Beverage, also known as ThaiBev, is no stranger to multi-billion mergers after a $11 billion deal in 2013 to take control of Singapore-listed Fraser and Neave (F&N).
The Thai firm is held by Charoen Sirivadhanabhakdi, Thailand's second-richest man, and ranks as one of Southeast Asia's largest beverage companies.
Asahi is Japan's biggest brewer with 38 percent market share but it is not widely sold overseas.
Known for its Super Dry beer, Asahi is looking to access growth outside Japan, which has seen two decades of declining beer sales due to a shrinking population and the growing popularity of wine.
As part of the deal, bidders will also secure control of Britain's craft beer brand Meantime Brewing, which SABMiller acquired last year.
(Additional reporting by Ajuli Davies in London, Ritsuko Shimizu in Tokyo, Khettiya Jittapong in Bangkok, Karen Lema in Manila and Martinne Geller in Davos; editing by Freya Berry and Sarah Young)