* OB sale Asia-Pacific's biggest private equity M&A exit
* OB generated estimated $500 mln in EBITDA at end 2013
* AB InBev had option to buy back OB from KKR, Affinity
* PE firms paid about $800 mln in cash in original deal, split almost evenly
HONG KONG, Jan 20 (Reuters) - Anheuser-Busch InBev SA , the world's largest brewer, has agreed to buy South Korea's Oriental Brewery Co Ltd from KKR & Co and Affinity Equity Partners for $5.8 billion including debt, regaining ownership of a key Asian asset at a time of strong growth in the industry across the region.
The deal, Asia's biggest ever private equity sale through an acquisition, comes one week after Japan's Suntory Holdings agreed to buy Beam Inc for $13.6 billion, with the transactions underscoring rapid consolidation in the global liquor industry.
Carlsberg, Heineken NV and SABMiller Plc have also struck deals in Asia over the past five years, lured by the region's $258 billion market that is growing twice as fast as the rest of the world.
Leaven, Belgium-based AB InBev sold Oriental Brewery in 2009 for $1.8 billion to KKR, as part of its efforts to ease the debt burden incurred in the $52 billion acquisition of U.S. beer maker Anheuser-Busch by InBev a year earlier. KKR agreed to pay around $800 million in cash for OB and the rest in debt, later splitting the cash portion with Affinity roughly in half.
"OB will strengthen our position in the fast-growing Asia Pacific region and will become a significant contributor to our Asia Pacific zone," Carlos Brito, Chief Executive Officer of AB InBev said in a statement.
AB InBev has a relatively small presence in Asia Pacific, with the region accounting for 14.3 percent of the 403 million hectoliters of beer it sold and 2.5 percent of its $15.5 billion in earnings before interest, taxes, depreciation and amortization (EBITDA) in 2012.
KKR and Affinity's sale of Oriental Brewery represents a multiple of over five times the cash they paid, according to a source with knowledge of the matter, a huge return for a deal of this size, rewarding the firms with hundreds of millions of dollars in net profit.
AB InBev, which sells brands including Stella Artois and Bud Light, retained an option to buy back OB, as the South Korean biggest brewer is known, within five years from the date of the 2009 sale. For the buyout firms, it was a high risk deal less than a year after the collapse of Lehman Brothers when there was no clarity on how long the global recession would last.
Under its private equity owners, OB cut costs, increased cash flow and gained market share to become South Korea's biggest brewer. At the end of 2013, OB had an estimated $500 million in EBITDA, a core measure of cash flow, the statement added.
AB InBev was keen to reach an agreement well before the fifth anniversary of the initial deal as it had feared rival suitors to be interested in OB, which along with Hite Jinro controls 90 percent of South Korea's beer market.
It has also been keen on South and Central American growth and last year it acquired its remaining shares of Mexico's Modelo Grupo for $20.1 billion.
Rapid growth in Asia's beer market has drawn global brewers seeking to offset sluggish sales in mature markets and as a result, beer-related M&A in Asia has commanded rich premiums. Heineken NV paid $6.4 billion for control of Tiger beer maker Asia Pacific Breweries Ltd in 2012, translating into a multiple of 35 times earnings.