Asahi Breweries sells Haitai Beverage for just US$9

Asahi Breweries sells Haitai Beverage for just US$9

Haitai Beverage was supposed to spearhead Asahi Breweries' drive into overseas drinks markets, but the Japanese brewer has offloaded the subsidiary for next-to-nothing after it failed to turn a profit.

Asahi said today (29 October) that it has agreed to sell its 58% controlling stake in South Korea-based Haitai Beverage to LG Household and Healthcare for a mere JPY727 (US$9). The deal is expected to complete by the end of 2010.

Japan-based Asahi invested in Haitai in 2000 and planned to use the business as a platform for international growth, but the tie-up has not worked out that way. "Haitai has not been able to become a profit-generating company, and it is uncertain whether this is achievable in the forseeable future," said Asahi.

Haitai reported operating losses of KRW39.4bn (US$0.035bn) in 2009, with sales of KRW260bn. Its second largest shareholder is Lotte Group, with a 19% stake. MB Asia Foods holds 18.7%, while Mitsui & Co and Dentsu have minor stakes in the firm.

In the last couple of years, Asahi has turned to fresh acqusitions to drive its ambition of obtaining between 20% and 30% of its annual sales from overseas markets by 2015.

The group owns a 20% in China's Tsingtao Brewery and has bought up the number two and three players in Australia's soft drinks market, Schweppes Australia and P&N Beverages.

Restructuring charges caused Asahi's net profits to slide by 37% for the nine months to the end of September, to JPY26.3bn, the firm said today.