Beverages News
- SABMiller venture to buy Blue Sword
Date: 5-Jan-2007 Sources: (Shenzhen Daily)
SABMILLER Plc., the world's second-biggest brewer, said Thursday its China venture will buy a local partner for 2.5 billion yuan (US$320 million) in its latest acquisition to expand into the interior of the world's biggest beer market.
China Resources Snow Breweries Ltd., 49 percent owned by SABMiller, agreed to buy the shares it doesn't already own in Blue Sword (Group) Co. Blue Sword owns 38 percent stakes in 14 breweries in Sichuan Province, with the remaining shares owned by China Resources Snow.
'The purchase would enable China Resources to gain more control of China's central and western markets, where Blue Sword beer is quite popular,'' said Guo Rui, an analyst of Industrial Securities Co., said in Shanghai. 'China Resources has an aggressive strategy.''
The acquisition is SABMiller's latest effort to expand its market share in China against rivals including Anheuser-Busch Cos., the world's biggest brewer, and Carlsberg A/S.
SABMiller plans to increase sales and production in China's western provinces through acquisitions and capacity expansion, complimenting its operations on the affluent eastern coast.
In October, SABMiller said that China Resources Snow had become the country's largest brewer by sales volume, with a 15 percent market share, beating domestic rival Tsingtao Brewery Co.
Anheuser-Busch owns a 27 percent stake in Tsingtao Brewery, which has a 14 percent market share in China. Carlsberg, which is planning to invest as much as US$880 million in Asia in the next three years, is seeking acquisitions in China's eastern regions to help it expand 15 percent annually in the country, senior vice president Jesper Madsen said Nov. 27.
SABMiller last month said it will buy two breweries in northern China for a combined US$22.4 million.
Sichuan, where Blue Sword is based, is China's 10th-biggest province by economic output, with 738.5 billion yuan in 2005, according to the government's Web site. Per capita spending last year was 6,891 yuan.
'Sichuan is a major profit center for China Resources Snow and its contribution has been rapidly rising on expanding market share,'' Mark Chen, managing director of China Resources, said in Thursday's statement.
The acquisition and consolidation would 'enhance the operational efficiency'' and control of the 14 breweries, China Resources Snow said in a separate statement Thursday. The venture's Chinese parent, China Resources Enterprise Ltd., is a retailer and brewer.
Blue Sword operates 13 breweries in Sichuan, with a combined annual production capacity of 1.56 million kiloliters, the statement said. A new brewery with capacity of 160,000 kiloliters will start production in June.
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