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Friday October 9, 2009

AB InBev selling theme parks


BRUSSELS: Private equity firm Blackstone Group LP plans to buy Anheuser-Busch InBev’s US theme parks for up to US$2.7bil, the companies said on Wednesday, expanding the private equity firm’s entertainment portfolio.

The sale by AB InBev was widely expected as the company focuses on paying off US$45bil in loans from the US$52bil merger last year that made it the world’s biggest beer maker.

After Belgium’s InBev took over US rival Anheuser-Busch, it set a target to raise US$7bil from divestments. The theme park deal, one of the largest private equity transactions this year, would push it to within about US$500mil of that target.

Blackstone will acquire Busch Entertainment Corp (BEC), which the brewer said was the second largest theme park operator in the United States.

That will add 10 parks – including three SeaWorlds and two Busch Gardens – to Blackstone’s existing amusement assets such as the Madame Tussauds wax museums, Legoland and the London Eye Ferris wheel.

Blackstone would pay US$2.3bil on closing and a right to participate in its return on initial investment capped at US$400mil, the companies said in a statement.

The private equity firm was investing up to US$1bil of equity in the deal, a source said. The investment is coming out of Blackstone’s US$21.7bil buyout fund, BCP V, which the firm finished raising in 2007.

Financing for the deal included a US$950mil term loan, US$450mil of mezzanine financing and a US$100mil undrawn revolver, the source said.

Private equity firms have been largely unable to strike deals of scale since the credit crisis virtually shut off access to financing for leveraged deals, but have of late been able to access limited amounts of debt for deals.

Blackstone will use senior secured credit facilities and mezzanine debt to finance its purchase. The senior credit facilities are being provided by BofA Merrill Lynch, Barclays Capital, Deutsche Bank Securities, Goldman Sachs Loan Partners and Mizuho Corporate Bank.

AB InBev said it expected the deal to close in the first half of 2010. — Reuters

Rival theme park operators, which have been hit in the recession as families curb spending, include Walt Disney Co, General Electric Co’s Universal Studios, Six Flags Inc and Cedar Fair LP.

The brewer of Budweiser, Stella Artois and Beck’s may still sell 11 breweries in seven countries in central and eastern Europe. Private equity firm CVC Capital Partners had submitted the only bid, of about US$2bil, sources say.

AB InBev has made no comment on this possible sale. — Reuters


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