CHINA: Another Chinese brewer for InBev
InBev said today (23 January) that it will immediately acquire a 39.48% stake in Fujian Sedrin from the state, with the remaining 60.52% held by various other shareholders being bought up between now and the end of 2007.
"This transaction is a very significant step in our strategy and strongly reinforces both our leadership position and footprint in southeast China," said Carlos Brito, InBev CEO. "Fujian Sedrin is one of the most profitable Chinese brewers and in recent years has achieved an EBITDA margin in excess of 30%. The Sedrin brand will be one of InBev's top five selling brands globally by volume with significant potential for growth and expansion."
Speculation late last year suggested that the Chinese brewer had held talks with major international groups including Heineken and Anheuser-Busch to sell a controlling stake.
InBev's purchase represents an implied 2005 EV/EBITDA multiple of 13 times. The company said that it expects the acquisition to be earnings accretive to operating results in year one, with Return On Invested Capital (ROIC)-Weighted Average Cost of Capital (WACC) breaking even in four years.
Fujian Sedrin is the leading brewer in Fujian Province with a market share of approximately 45% in 2004. It also had an approximately 18% market share in Jiangxi Province in 2004. Fujian Sedrin's portfolio includes Sedrin Prime Beer, Sedrin Tiandi, Sedrin Pure Draft, and Sedrin Ice Beer in the local premium segment and core lagers such as Sedrin Jingpin and Sedrin Teshuang.
Fujian Province is situated on China's eastern coast and has a population of approximately 35m.
Late last week, InBev confirmed that it had upped its stake in Zhujiang Beer, located in the southern Guangdong province, from 24% to 25.31%.
The global roll-out of InBev's Brazilian beer, Brahma, adds a third premium brand to the global brewer's international portfolio but some observers have suggested it's an unnecessary step which threat...
Investment bank Goldman Sachs has restarted coverage of InBev. It has given the world's largest brewer by volume an "outperform" rating....
Heineken has acquired a 40% stake in a Chinese brewery....
Heineken Espana is looking to invest heavily in a new plant in southern Spain....
InBev has added a Russian brewery to its pilot project to improve efficiency throughout its operations....
Anheuser-Busch has had its rating downgraded....
Grupo Empresarial Bavaria is not looking to sell up, its president has confirmed....
The chief financial officer of Brau Union has resigned....
- Comment - The Appeal and Perils of Craft
- Review of the Year 2014 - Part IV: Spirits
- Time is Right for Refresco Gerber Exit
- Sustainability in Wine - Part I
- just the Ten - Top News Stories of 2014
- Belvédère to sell assets, streamline portfolio
- Belvedere vodka tie-up over new James Bond film
- Diageo ups focus on China with Mortlach roll-out
- Brown-Forman eyeing Scotch, Irish whisk(e)y entry?
- Diageo rolls out Beckham's Haig Club to US
- Global vodka insights - market forecasts, product innovation and consumer trends research
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- The IWSR Forecast Report - 2014-2019 Global Review
- Global Tequila Market 2014-2018
- Global market review of non-Scotch whiskies – forecasts to 2018