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China: Beijing Yanjing Brewery, China's third-largest brewer controlled by red-chip Beijing Enterprises, said it plans to raise its stake in Fujian Yanjing Huiquan Brewery to 52.37 % from 38.15 % for 131.58 million yuan (HK$123.92 million), The Hong Kong Standard revealed on October 12. Under the plan, Shenzhen-listed Yanjing Brewery will buy 14.22 per cent or 35.56 million shares of its sister company, Shanghai-listed Huiquan Brewery, from five shareholders at 3.7 yuan per share, according to its filing to the mainland stock exchange on Monday.

“Yanjing Brewery will have the controlling stake in Huiquan Brewery after the transaction. This will enhance our company's brand awareness as well as our strategic position in the country,'' Yanjing Brewery said.

Listed in February 2003, Huiquan Brewery, located in Huian county, Fujian province, produces 800,000 tonnes of beer each year, and ranks among the top 10 mainland breweries.

This latest stake acquisition comes two weeks after Yanjing Brewery agreed to pay 60.17 million yuan to increase control of two regional breweries as part of its expansion in the rapidly consolidating beer market.

It said earlier that it would pay 19.84 million yuan to purchase 22.55 per cent in Yanjing Brewery from Jiangxi Gannan Fruit, bringing its control to 100 per cent. It also said last month that it will acquire a 27.56 % stake in Baotou Yanjing Brewery from Baotou State-Owned Asset Supervision Management Commission for 40.33 million yuan. That will raise Beijing Yanjing's holding in Baotou Yanjing to 79.13 %.

Meanwhile, Yanjing Brewery said on Monday that it plans to inject 50 million yuan to boost its stake in Baotou Yanjing to 84.97 %.

China's brewery market has been attracting both domestic and foreign players to beef up share to make the most of the fast-growing economy. In mid-September, China Resources Enterprises and partner SABMiller agreed to buy Australian brewer Lion Nathan's China beer business for US$154 million (HK$1.2 billion).

Shares of Yanjing Brewery closed down 1.31 per cent at 12.8 yuan on Monday, and Huiquan Brewery finished up 2.66 per cent at 7.34 yuan.


13 October, 2004