Asahi Group Holdings Ltd. could save about 30 billion yen ($297 million) on its purchase of European beer brands from Anheuser-Busch InBev NV as Japan’s currency strengthened since the companies agreed on the deal.
The Japanese brewer expects its purchase of Peroni, Grolsch and Meantime beers to cost about 300 billion yen, down from 330 billion yen estimated earlier, Managing Director Yoshihide Okuda said in a briefing after Asahi announced results. It entered the deal for 2.55 billion euros ($2.9 billion) in April, conditional on AB InBev completing its purchase of SABMiller Plc.
Asahi is seeking overseas expansion to counter slumping beer consumption in Japan. The brewer of Super Dry reported a 28 percent drop in net income to 28.5 billion yen for the first half, a better result than the company earlier forecast, due to lower material costs and strong sales of non-alcoholic beverages such as bottled tea and coffee in Japan.
“The improvement in the domestic beverage business is as expected,” said Takashi Aoki, a fund manager at Mizuho Asset Management Co. in Tokyo. Profit is seen improving in the domestic beverage market as industry players have refrained from severe price competition, he said by telephone.
Still, Asahi expects the stronger currency to hurt repatriated sales from overseas, leaving its net income forecast for 2016 unchanged at 80 billion yen, less than the 84.1 billion yen average of 12 analyst estimates compiled by Bloomberg.
Asahi expects rising domestic sales, as well as internal actions such as cost-cuts to help offset some of the decline in overseas contribution, Okuda said. Japan’s largest beermaker cut its full-year sales forecast by 0.5 percent to 1.86 trillion yen, and raised its projection for operating profit by 2.7 percent to 140.7 billion yen.
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