SABMiller’s Chinese joint venture to acquire brewery business of Kingway
Posted: 5 February 2013 | SABMiller | No comments yet
“The acquisition of Kingway gives us greater access to high growth and attractive regional markets in China…”
SABMiller plc announces that China Resources Snow Breweries Limited (“CR Snow”), its joint venture with China Resources Enterprise, Limited (“CRE”), has entered into an agreement with Kingway Brewery Holdings Limited (“Kingway”) to acquire its brewery business (“Brewery Business”), for a total cash consideration of RMB 5.38bn (c. US$864m).
The Brewery Business comprises seven breweries, four of which are in one of China’s fastest growing and most affluent regions, Guangdong province, with breweries also in the growing Sichuan and Shaanxi provinces and Tianjin municipality. Total annual production capacity of the Brewery Business is 14.5 million hectolitres. In 2011, the Brewery Business sold 9.3 million hectolitres of beer.
The acquisition is highly complementary with CR Snow’s existing footprint and will reinforce its production base, sales infrastructure and market position in the fast growing Guangdong region as well as providing additional scale and market presence in Sichuan, Shaanxi and Tianjin.
Ari Mervis, Managing Director of SABMiller Asia Pacific, commented: “The acquisition of Kingway gives us greater access to high growth and attractive regional markets in China, thereby enhancing CR Snow’s competitive position.”
Mr. Chen Lang, Chairman of CRE said: “Kingway is a widely recognised brand and quality asset and enjoys a strong market share with an extensive sales network and established manufacturing infrastructures in China, especially in Guangdong province. We are delighted to have Kingway join the CRE family. The transaction not only strengthens our production capacity and economies of scale, but also further optimizes the sales network of CR Snow in China. This continues to enhance our leading position in China’s beer industry.”
The transaction is subject to regulatory approvals and final approval of Kingway’s shareholders.