CHINA: AB steps on SABMiller's toes at Harbin
Anheuser-Busch has announced that it has agreed to acquire approximately 29% of Harbin Brewery Group Limited. The purchase pits AB against SABMiller, who bought a 29.6% stake in the Chinese brewer last year.
The acquisition, through a purchase of Global Conduit Holdings Limited, an investment holding company, is valued at HK$1.08 billion (US$139m), or the equivalent of HK$3.70 per share.
In a statement, AB Cos Inc. president and CEO Patrick Stokes said: "Harbin fits our strategy of investing in leading companies in growth markets like China with good volume and profit growth potential. We look forward to working closely with Harbin management and believe this cooperation will allow us to better participate in the long-term growth of the industry in China."
The move marks AB's second investment in a leading brewer in China. Since 1993, Anheuser-Busch has been a minority investor in Tsingtao Brewery Co., Ltd. In 2002, the two companies announced a strategic alliance and initiated a best practices exchange program and other management initiatives. Anheuser-Busch currently owns 9.9% of Tsingtao, and has an agreement to increase the ownership to 27% over the next several years.
"This investment complements our successful Budweiser operations in China and our strategic partnership with Tsingtao," said Stephen J. Burrows, CEO and president of Anheuser-Busch International, Inc. "Tsingtao is supportive of Anheuser-Busch's investment in Harbin and agrees it will be beneficial for all parties. We look forward to further contributing to the growth and development of the China brewing industry."
SABMiller or AB could look to buy Harbin outright going forward. Under Hong Kong stock market rules, if either company go above a 30% stake, they will be obliged to launch a takeover offer for all remaining shares in the brewer.
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