The largest brewer of the country, China Resources Beer Holdings Co, has agreed to buy out the remaining stake in Snow Breweries, its joint venture with SABMiller Plc, a move to free itself from a foreign partner in its effort to tackle the local market. The deal for the 49 percent shareholding is valued at $1.6 billion. The Chinese brewer’s shares jumped 18.15 percent to HK$15.1 ($1.94) on Wednesday [2 March 2016]. The deal values Snow at 11 times the brewer’s 2014 net income before taxes, according to data from Bloomberg. The transaction has received regulatory approval, China Resources said in a statement on Wednesday…Full Article: China Daily Mar 2016

Key Points

  • As of 2015, China Resources Beer had 98 breweries, with “Snow Beer” as its best-selling brand.
  • In 2014, China Resources’ Snow Breweries had a 23.8% market share (by volume) in China, followed by Tsingtao Brewery’s Tsingtao Beer at 18.4%, Anheuser-Busch InBev at 14.3%, Beijing Yanjing Brewery at 12.3 percent, and Carlsberg Group at 7.5%.

ChinaAg Comments

  • In December 2015, China Resources began financial inquiries into purchasing SABMiller’s 49% stake in order to allow Anheuser-Busch InBev to secure anti-trust approval in China for the latter’s takeover of SAB Miller.
  • In October 2015, Anheuser-Busch InBev NV agreed to purchase SABMiller for US$104.2 billion.
  • As of early 2015, five breweries had an 80% share of the beer market in China. These include Huarun Snow Beer Co Ltd, Tsingtao Brewery Co Ltd, Anheuser-Busch InBev, Beijing Yanjing Brewery, and the Carlsberg Group.
  • In August 2014, Euromonitor International stated that Snow beer (operated by China Resources Enterprises) had a 21.7% market share in China, followed Tsingtao Brewery Co with 15.7%, Beijing Yanjing Brewery with 11.7%, Anheuser-Busch InBev at 11.4%, Henan Jinxing Brewery with 3.4%, and Carlsberg with 2.6%.
  • In February 2013, China Resources agreed to purchase Guangdong’s Kingway Brewery Holdings for HK $6.6 billion (US$851 million).
  • In 1998, China overtook Germany as the number two consumer of beer, and passed the United States as the top consumer in 2002.

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