E-Malt.com News article: 2677

Hong Kong: Anheuser-Busch, a leading global brewer, announced on May 19, 2004 the completion of its purchase of approximately 29 % of Harbin Brewery Group Ltd., a leading brewer in China, through the purchase of Global Conduit Holdings Ltd., an investment holding company. The holding company acquired the brewery shares from the City of Harbin under a previous agreement, and the transfer to Anheuser-Busch was completed after receipt of all requisite approvals for the transaction. The total purchase price was HK$1.08 billion (US$139 million), or the equivalent of HK$3.70 per share, Anheuser-Busch wrote.

The U.S. brewer's move has prompted world number-two beer maker SABMiller, which already holds 29.4 % of Harbin Brewery, to launch a bold US$553 million bid in early May. SABMiller said it would make an offer for all Harbin shares at HK$4.30 each. Anheuser-Busch spokesman in Hong Kong declined comment on whether the U.S. firm plans to make a counter offer.

Harbin Brewery Chief Executive Peter Lo has said it favoured the U.S. giant as a long-term partner, and the Harbin city government also backed Anheuser-Busch saying it was "the right strategic partner" for Harbin. Harbin's board of directors had urged its shareholders not to act on SABMiller's offer. SABMiller is scheduled to send an offering document to all Harbin Brewery's shareholders no later than next Wednesday.

Anheuser-Busch acquired Harbin shares via the purchase of an investment holding company, Global Conduit Holdings Ltd. Shares in Harbin Brewery ended unchanged at HK$4.75 on May 19. The stock has gained more than 47 % since SABMiller launched the hostile bid for the firm.

China's beer market is far less profitable than developed countries. Still, large brewers such as Anheuser-Busch and No. 2 SABMiller are eager to establish a foothold in a market that surpassed the United States in 2002 to become the world's largest.

SABMiller already has interests in 30 breweries in northeastern and central China and a 49 % stake in China Resources Breweries Ltd. - China's second-largest beer-maker after Tsingtao Brewery Co.

Anheuser-Busch also has a big stake in the Chinese beer market. Last year, the company paid about $182 million to increase its 4.5 percent interest in Tsingtao to 27 % over seven years. The deal gave Anheuser-Busch representation on the Tsingtao board, supervisory board and key board committees. Anheuser-Busch also owns 98 % of the Budweiser Wuhan International Brewing Co. in Wuhan, China, where its Budweiser and Bud Ice brands are brewed. Budweiser is the leading international beer sold in China.


21 May, 2004