Buying SABMiller’s Central and Eastern European beer, and making Europe a pillar (2016)

The weight of a contrarian bet — buying maturity

What defines this decision is that Asahi deliberately chose not a growing market but a fully grown one. Where many rivals were betting on volume growth in emerging economies, Asahi bought established staple brands outright in a developed market whose per-capita consumption had already plateaued. One can read it as the conviction — earned when Super Dry overturned share at home — that it is precisely in a settled market that a company can earn through position and premiumization. The idea running through this deal is not to start a new business through M&A but to take in an already-established base of earnings.

That said, a strategy of buying mature markets — where volume will not suddenly rise — presupposes the execution to keep earning on price and efficiency. The nimbleness of deciding successive European acquisitions worth some ¥2 trillion in little more than two years was bold, but it was also a decision to shoulder enormous goodwill and interest-bearing debt. How well Asahi can polish the staples it bought and keep drawing steady profit from mature markets — on that everything hangs; the Central and Eastern European purchase was the move that would decide the fate of a bet to shift the source of growth to mature markets abroad.