Asahi in talks on South Korean brewery deal

NEW YORK, Feb 5 - Japan's Asahi Breweries Ltd and South Korea's Lotte Group are in talks on a joint acquisition of No. 2 South Korean brewer Oriental Brewery Co for 100 billion to 150 billion yen ($1.09 billion to $1.64 billion), the Nikkei business daily said.

Anheuser-Busch InBev NV, the world's largest brewer, owns a majority interest in Oriental Brewery and is planning to put it up for sale, possibly by the end of February, Nikkei said in its Friday edition.

Anheuser has informally asked Lotte to bid, but the sides have not yet reached an agreement on a price, the Nikkei said.

It said the Belgium-based brewer would use proceeds from the sale of Oriental to help pay down debt InBev incurred in the 2008 acquisition of Anheuser-Busch.

The paper said that if Asahi and Lotte agreed on a joint acquisition of Oriental, Lotte would probably make the purchase alone initially, with Asahi acquiring an interest later.

The interest would probably be limited to 30 percent because the acquisition of a major South Korean firm by a Japanese company would be "likely to trigger a public backlash," the Nikkei said.

Oriental has about 40 percent of the South Korean beer market and has annual sales of about 62 billion yen. Asahi and Lotte already have close marketing ties, Nikkei said.

Hite Brewery Co Ltd is the leading South Korean brewer. ($1=91.4993 yen)