Belgium brewer Interbrew has acquired a 70% controlling stake in Zhejiang Shiliang Brewery Company Ltd., located in the Yangtze Delta, for US$53.2m.

The transaction strengthens Interbrew's number one position in Zhejiang Province where, pursuant to this transaction, the company will have a market share of close to 50%. The transaction is expected to close during the summer of 2004.
Interbrew currently has six breweries and one bottling centre in Zhejiang Province, representing operations in Ningbo, Zhoushan, Wenzhou, Yandangshan, Pingyang, Jinhua and Yuyao.

Zhejiang Shiliang Brewery owns a strong local brand, Red Shiliang.

The transaction was completed at an EV/EBITDA multiple of 11.6, Interbrew said. On an EPS before goodwill amortization basis the acquisition will make an accretive contribution to Interbrew's EPS from year one, it added.

"With this acquisition Interbrew has reinforced its leading position in Zhejiang by adding over 2m hl sales volume to its current operations in the province." said Patrice Thys, president Interbrew Asia Pacific Zone. "Zhejiang, one of the wealthiest provinces in East China, is a key platform for advancing our strategy of being a leading player in China's beer industry."

Zhejiang Shiliang Brewery Company Ltd.'s General Manager, Qiu Jiangsheng said: "Zhejiang Shiliang Brewery Company Ltd. is very pleased to have reached agreement with Interbrew, the world's major brewery group, with respect to this transaction. By combining our own strength in the brewery operation and Interbrew's technical, management and financial capacitates, Zhejiang Shiliang Brewery Company Ltd. can further enhance its competitiveness and achieve better development in the future.