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HONG KONG: AB beats SABMiller to Harbin

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Anheuser-Busch has emerged victorious from its bidding war with SABMiller for Harbin Brewery. SABMiller has said today that it will not proceed with its voluntary offer of HK$4.30 for shares in Harbin Brewery and that it will accept the offer of HK$5.58 that Anheuser-Busch has announced it will be making for shares in Harbin Brewery.

SABMiller's retreat signals the end of the first takeover battle between foreign companies for a major Chinese firm. AB will pay SABMiller US$211m and the company will realise a substantial profit over the price it paid to purchase the stake in Harbin Brewery in July 2003.

In a statement, SABMiller said that it believes that the offer price by AB of HK$5.58 more than fully values the potential of the company and it is in the best interests of SABMiller and its shareholders to accept.

SABMiller also said that it has made clear since announcing its offer for Harbin Brewery that Harbin Brewery could benefit from becoming a part of SABMiller's China strategy through the potential synergies to be derived by aligning Harbin Brewery with its interest in China Resources Breweries. However, the company had also indicated that Harbin Brewery was not an essential asset at any price.

SABMiller already has an established position in China and will continue to make further investments to strengthen this through its joint venture interest in China Resources Breweries (CRB). CRB currently owns 32 breweries throughout China.

CRB will continue to pursue solid organic growth and will consider other asset acquisitions if the value is appropriate and it strengthens CRB's strategic interests in China, SABMiller said.

Commenting on the announcement, SABMiller CEO Graham Mackay said, "We remain fully committed to the Chinese beer market and we must evaluate every potential acquisition on its merits. We believe that the AB offer price for Harbin more than fully values the business, even after taking into account the significant synergies uniquely available to us.

"We have a successful ten year history of expansion and profitability in China and a clear strategy to grow the business through CRB, which I am pleased to say remains on course," Mackay added.


Sectors: Beer & cider

Companies: SABMiller

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