Interbrew, the Belgian brewing giant, is to acquire a 50% stake in the Chinese beer operations of the Malaysian company the Lion Group.
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In a statement, Interbrew said it would pay US$131.5m for the stake in Lion Diversified Holdings Berhad (LDHB), which is listed on the Kuala Lumpur Stock Exchange.
LDHB realised a total beer volume of 11m hectolitres in 2002 and the deal places Interbrew as the third largest brewer in China in terms of production volumes, achieving almost a 9% market share, with 21m hl sold.
Interbrew will assume management control of the partnership and will also have a call option on the remaining 50%, that can be exercised any time 12 months after the transaction has been completed, for a further consideration of US$131.5m.
John F. Brock, Interbrew’s CEO, said: “I am very pleased that this strategic partnership has been formed. It represents a significant step in our overall strategy, and allows local management to do what they do best. It also allows Interbrew the opportunity to share marketing expertise, brand management skills and technical knowledge with our local partners. China continues to command a high priority for Interbrew, and this transaction testifies to our continued commitment to the China market.”
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By GlobalDataThe company statement said that the partnership cleared key acquisition criteria for Interbrew: significant potential to grow outside both local and regional markets through strong brands, volumes, economies of scale and critical mass; continued focus on the core lager segment; and solid, dependable management resources.
The transaction is expected to close during the first quarter of 2004 after due diligence, shareholder approval and necessary regulatory approvals in Malaysia.
