* Asahi to buy brands for $7.8 billion
* Expects to close deal in first half of 2017
* Asahi shares close down 4.6 pct on funding questions (Adds valuation estimates, background)
By Thomas Wilson and Martinne Geller
TOKYO/LONDON, Dec 13 (Reuters) - Asahi Group Holdings will buy a group of eastern European beer brands fromAnheuser-Busch InBev for 7.3 billion euros ($7.8billion), boosting its presence in the region in the largestinternational beer deal by a Japanese brewer.
Anheuser-Busch InBev agreed to sell the brands, includingCzech market leader Pilsner Urquell, Poland's Tyskie and Lech,Hungary's Dreher and Romania's Ursus, to ease clearance fromcompetition regulators for its $100 billion takeover ofSABMiller, finalised in October.
The deal, expected to close in the first half of next year,would be Asahi's biggest acquisition and its latest purchase inEurope, where it has also bought SABMiller's Italian brandPeroni and Dutch beer Grolsch.
It was announced on Tuesday morning, less than 24 hoursafter the deadline for final bids, according to sources close tothe matter.
Asahi said on Tuesday that the business had annual earningsbefore interest, tax, depreciation and amortization (EBITDA) of493.8 million euros in the year to the end of March.
Based on that figure, its bid represents a multiple of 14.8times, which is higher than the 12 to 14 times brewing assets inmature markets normally fetch.
Asahi's winning bid compared with the 15 times EBITDA itpaid for Peroni and Grolsch, which was fueled in part bysynergies in Australia with Asahi's existing business.
Asahi, which is looking to offset sluggish growth in itshome market, said the acquisition would lift overseas sales as aproportion of total sales to nearly a quarter from 16 percent inOctober.
Also expanding from its Japanese base, Sumitomo Corp agreed last week to buy Ireland's Fyffes for751 million euros in a deal that will merge the largest bananadistributors in Asia and Europe.
EUROPEAN RANKING
The acquisition will give Asahi about 9 percent of theEuropean beer market, excluding Russia, said Bernstein analystTrevor Stirling, placing it third behind Heineken with20 percent and Carlsberg with 12 percent.
Sources had told Reuters that Asahi was a favourite to buythe brands. In the first round of bidding, Asahi competedagainst a consortium led by Swiss investment firm JacobsHolding, Czech investment firm PPF, China Resources and private equity firms Bain Capital and Advent International,they said.
Asahi shares fell more than 6 percent before closing down4.6 percent, with market participants pointing to investornerves about how the deal would be funded.
Asahi gave no details, but a source close to the situationsaid the Japanese brewer would use debt on its own balancesheet, which as of September showed $471 million in cash,according to Thomson Reuters data.
Not including the Asahi deal, Japanese companies have spent$77.6 billion on outbound mergers and acquisitions this year,Thomson Reuters data shows, as they seek to counter deflation,weak consumer spending and a shrinking population at home.
The Asahi deal pushes this year's figure close to the record$87 billion Japanese companies spent on overseas M&A deals in2015. It is the second biggest acquisition by a Japanese breweron record, behind brewer and distiller Suntory Holdings Ltd'snear $14 billion purchase of Beam in January 2014.
($1 = 115.0500 yen)
($1 = 0.9400 euros)
(Reporting by Chang-Ran Kim, Thomas Wilson and Ritsuko Shimizuin Tokyo, Martinne Geller in London and Philip Blenkinsop inBrussels; Editing by Jason Neely and Keith Weir)
