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Hong Kong: Anheuser-Busch Cos Inc will contribute US$8 million to a fund it plans to form with the Chinese city of Harbin to promote economic development and support for citizens, the world's biggest brewer said on May 25. The U.S. brewer made the announcement amid speculation that it will make an offer for Harbin Brewery Group Ltd, which is based in the north-eastern Chinese city, to trump a hostile US$550 million bid formally launched on Monday by British-based SABMiller Plc, the world's second-largest beer maker.

"We think this kind of good corporate citizenship helps create a more favourable business environment in the future," said Stephen Burrows, chief executive officer and president of Anheuser-Busch International Inc. Anhweser-Busch, maker of Budweiser beer, also said in a statement it would consider locating a new regional Budweiser distribution centre in Harbin to supply northeast China.

The American brewer and the city plan to form the Anheuser-Busch and Harbin Civic Development Trust Fund, the company said in a statement. "The Trust Fund will be established with a contribution by Anheuser-Busch of US$8 million to create development opportunities for the citizens of Harbin," the statement said.

It said the activities of the fund would include an annual beer festival to promote the beer industry and Harbin as a tourist destination, forums for international investors and funding for education, training and healthcare programmes. "Our company believes in investing in communities in which we operate," said Patrick Stokes, president and chief executive officer of Anheuser-Busch, in the statement.


Foreign brewers are scrambling to invest in China, the world's biggest beer market by volume.

Anheuser-Busch triggered the takeover battle for Harbin Brewery by recently striking a deal to buy 29 percent of China's fourth-largest beer maker for US$139 million, or HK$3.70 a share. It said on May 19 it had completed the purchase.

That move prompted SABMiller, which owns 29.4 percent of Harbin Brewery, to launch a cash offer for Harbin shares on Monday.

SABMiller offered HK$4.30 for each Harbin Brewery share. Harbin Brewery management has rejected the bid, saying it would prefer to team up with Anheuser-Busch, which is expected to make a higher counter-offer.

Harbin Brewery ended up 1.51 percent at HK$5.05 in Hong Kong on Tuesday. The stock has soared 49 percent over the past month.

The Harbin city government also favours an Anheuser-Busch partnership with Harbin Brewery. Mayor Shi Zhongxing has said Anheuser-Busch is "the right strategic partner" for Harbin Brewery.

Apart from its interest in Harbin Brewery, Anheuser-Busch also holds a 9.9 percent stake in Tsingtao Brewery Co Ltd. In central China's Wuhan, the U.S. firm also owns a brewery that produces the Budweiser beer.


31 May, 2004