CHINA: SABMiller CR Snow venture expands reach
SABMiller expands in China via CR Snow Breweries deals
SABMiller's Chinese joint-venture, China Resources Snow Breweries, has acquired all outstanding shares in two breweries in China's Zhejiang province, as it seeks to expand its reach in the country's beer market.
CR Snow, which is 51%-owned by China Resources Enterprise, has signed a deal with Asahi Breweries Itochu to acquire the 55% of Hangzhou Xihu Breweries Asahi and the 25% of Hangzhou Xihu Breweries Asahi that it did not already own. The deals are valued at a combined US$47m, SABMiller said today (2 August).
The Peroni brewer, which holds the other 49% of CR Snow, said that the deals will make both companies wholly-owned subsidiaries of CR Snow and will enhance its presence in China's Zhejiang province, in the south-east of the country.
It said that Zhejiang is one of the largest markets in central China. Lager sales there rose by 7% to 28m hectolitres in SABMiller's most recent fiscal year, to the end of March.
The CEO of China Resources Enterprise, Chen Lang, said that, following completion of the stake purchases, CR Snow "will continue to actively seek and evaluate investment opportunities in order to further expand its businesses".
The acquisitions follow a series of deals completed by CR Snow this year as it seeks to expand on China's emerging beer market. Last week, SABMiller said that CR Snow has acquired one of the largest breweries in Henan province, Shangqiu Lanpai Brewery, for an undisclosed fee.
On 13 July, CR Snow said that it had acquired the 49% equity interest in Jiangsu Dafuhao Breweries Co held by Asia Pacific Breweries, Heineken's joint-venture with Fraser & Neave. As part of that deal, CR Snow also acquired 100% of Shanghai Asia Pacific Brewery Co. Financial details were not disclosed.
"CR Snow is putting itself in the best position to tap into the profit pool and widen the gap between the company and its competition," said SABMiller's MD for Asia, Ari Mervis, who is also CR Snow's chairman.
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