CHINA: Kingway Brewery bid speculation grows
SABMiller, Anheuser-Busch InBev to fight for Kingway Brewery?
In January, Kingway's owner, state-controlled GDH, said that weak finances mean it is seeking to sell either some or all of its beer business. Situated in southerly Guangdong, once of China's most affluent provinces via its close proximity to Hong Kong, Kingway represents a potential opportunity for multinational brewers seeking a bigger slice of China's growing beer market.
Today (10 February), Dow Jones reported that Anheuser-Busch InBev and Tsingtao Brewery have expressed interest in a deal with Kingway. Bids are due by the third week of February, it said, citing people familiar with the situation.
SABMiller's joint-venture with China Resources Enterprise, CR Snow Breweries, has also been linked with the brewer. Last year, GDH vetoed CR Snow's agreeement to buy Asia Pacific Breweries' 21% stake in Kingway.
When contacted by just-drinks, both SABMiller and A-B InBev declined to comment on the Kingway speculation. However, both are openly seeking to expand their presence in China. The country is already the world's largest beer market, despite figures showing it still consumes less than half of the beer per capita than the world's second largest market, the US.
According to analysis published this week by Sanford Bernstein, a takeover of Kingway would give A-B InBev outright leadership of Guangdong Province's beer market. Kingway has a 9% volume share, with A-B InBev level with Zhujiang on 20%.
Meanwhile, a deal for CR Snow would hand the brewer a much-needed lift against more powerful rivals in the region. CR Snow has a volume share of 5% in Guangdong, based on 2010 figures.
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