SABMiller's Chinese joint venture to acquire brewery business of Kingway
SABMiller plc announces that China Resources Snow Breweries Limited ("CR Snow"), its joint venture with China Resources Enterprise, Limited ("CRE"), has entered into an agreement with Kingway Brewery Holdings Limited ("Kingway") to acquire its brewery business ("Brewery Business"), for a total cash consideration of RMB 5.38bn (c. US$864m).
The Brewery Business comprises seven breweries, four of which are in one of China's fastest growing and most affluent regions, Guangdong province, with breweries also in the growing Sichuan and Shaanxi provinces and Tianjin municipality. Total annual production capacity of the Brewery Business is 14.5 million hectolitres. In 2011, the Brewery Business sold 9.3 million hectolitres of beer.
The acquisition is highly complementary with CR Snow's existing footprint and will reinforce its production base, sales infrastructure and market position in the fast growing Guangdong region as well as providing additional scale and market presence in Sichuan, Shaanxi and Tianjin.
Ari Mervis, Managing Director of SABMiller Asia Pacific, commented: "The acquisition of Kingway gives us greater access to high growth and attractive regional markets in China, thereby enhancing CR Snow's competitive position."
Mr. Chen Lang, Chairman of CRE said: "Kingway is a widely recognised brand and quality asset and enjoys a strong market share with an extensive sales network and established manufacturing infrastructures in China, especially in Guangdong province. We are delighted to have Kingway join the CRE family. The transaction not only strengthens our production capacity and economies of scale, but also further optimizes the sales network of CR Snow in China. This continues to enhance our leading position in China's beer industry."
The transaction is subject to regulatory approvals and final approval of Kingway's shareholders.
Notes to editors
SABMiller plc is one of the world's leading brewers with more than 200 beer brands and some 70,000 employees in over 75 countries. The group's portfolio includes global brands such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch; as well as leading local brands such as Aguila (Colombia), Castle (South Africa), Miller Lite (USA), Snow (China), Victoria Bitter (Australia) and Tyskie (Poland). SABMiller also has growing soft drinks businesses and is one of the world's largest bottlers of Coca-Cola products.
In the year ended 31 March 2012 the group reported EBITA of US$5,634 million and group revenue of US$31,388 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
China Resources Snow Breweries, Limited
China Resources Snow Breweries Limited was established in 1993 and became a joint venture with SABMiller plc in 1994. It is engaged in the production, sales and marketing of beer in China. Its shareholders are China Resources Enterprise, Limited and SABMiller Asia Limited, a subsidiary of SABMiller plc. China Resources Enterprise, Limited has a 51% interest in China Resources Snow Breweries Limited while SABMiller Asia Limited holds the remaining 49% interest. It operates over 80 breweries in China with a total volume capacity of more than 170 million hectolitres.
China Resources Enterprise, Limited
China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchange ("HKSE") and is also one of the constituent stocks of the Hang Seng Index in Hong Kong. The Group focuses on the consumer businesses in both the Chinese Mainland and Hong Kong, with core activities being retail, beer, food and beverage.
Kingway Brewery Holdings, Limited
Kingway Beer Group was established in 1985; Kingway Brewery Holdings Ltd. (previously Guangdong Brewery Holdings Ltd.) was established and then listed on the HKSE in 1997. Kingway is principally engaged in the production, distribution and sale of beer. In 2011 Kingway sold 9.3 million hectolitres of beer and reported revenues of HK$1.758 billion.
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