Seoul, April 20 - South Korean retail giant Lotte Group confirmed on Monday it had not handed in a final offer for Oriental Brewery (OB), while the beer maker's labour union launched a strike before a buyer was picked.
Anheuser-Busch InBev, the world's largest brewer and the owner of OB, was believed to have accepted final offers on Friday for the South Korean brewer, which it has valued at more than $2 billion.
With Lotte dropping out, the deal was expected to come down to three private equity houses -- Affinity Equity Partners, Kohlberg Kravis Roberts & Co and MBK Partners, backed by teams of bank lenders, according to sources close to the deal.
"We did not participate in the bidding," said Lotte Group spokesman Park Sang-sup.
"There were various reasons, including pricing," he said, declining to elaborate further.
Lotte had been seen as a front-runner to buy OB, given its financial muscle and determination to start a beer business, but its original and revised bids were rejected by InBev as too low, prompting the company to bow out of the final round, sources had said.
Jang Kyung-yon, a senior official of OB's labour union, told Reuters that unionised workers representing 80 percent of the total began a strike at its three factories on Monday as InBev had yet to accept its demands related to the planned sale. The union has urged InBev to give back 10 percent of any proceeds from the sale for investment and dividends.
"Because there's a high possibility that our company will be bought by a private equity fund, which tends to restrain investment in acquired companies to maximise short-term profits, we're asking for some of the proceeds to be used for investment," Jang said.
"But InBev's stance is that investment is not a matter that can be negotiated with the union."
He said it had not been decided how long the walkout would continue.
OB commands 40 percent of the country's beer market, trailing bigger rival Hite Brewery. It declined to comment on the sale.