26 February 2009
SABMiller joint venture makes China acquisitions in Anhui, Liaoning and Zhejiang Provinces
China Resources Snow Breweries Limited ("CR Snow"), SABMiller's joint venture in China with China Resources Enterprise, Limited ("CRE"), has announced that it has agreed to acquire three breweries in Anhui, Liaoning and Zhejiang provinces in three separate transactions. The total investment cost for the three acquisitions is about US$110 million, which includes a cash consideration of approximately US$93 million.
CR Snow has agreed to acquire the respective brewing assets of Anqing Tianzhu Beer Company Limited ("Tianzhu Beer"), Liaoning Songlin Brewery Group Company Limited ("Songlin Brewery") and Zhejiang Luck Beer Company Limited ("Luck Beer") through three newly-formed subsidiaries in which it will own 80%, 85% and 100% equity interests respectively. All three breweries will undergo a technical upgrade to their existing facilities to comply with the production requirements of the SNOW brand. Following this investment, they will add a total of 4.7 million hectoliters to CR Snow's existing production capacity of about 117 million hectolitres.
Tianzhu Beer is situated in Anqing, an historic city in the south-western region of Anhui Province. It had an annual production capacity of about 980,000 hectolitres and sales volumes of about 400,000 hectolitres in 2007. At present, CR Snow has eight breweries in Anhui Province and is the leading brewer in the province. The acquisition will enhance the company's operational efficiency in southern Anhui and further consolidate its substantial share in the region.
Songlin Brewery has two plants at Chaoyang and Jianping with a total sales volume of approximately 1.05 million hectolitres in 2007. Its combined annual production capacity of 2.08 million hectolitres will be increased to 2.5 million hectolitres following acquisition. Songlin Brewery will generate synergies with CR Snow's existing breweries at Huludao and Panjin, cementing a strong network in western Liaoning. It will also provide a foothold for expansion into the central part of Inner Mongolia. Currently, CR Snow is the largest brewer in Liaoning Province with nine breweries.
Luck Beer is located at Yuhuan county, Taizhou, an economically prosperous coastal city in central Zhejiang. It has an annual production capacity of about 1.2 million hectolitres and sales volumes of about 330,000 hectolitres in 2007. CR Snow currently has three breweries in northern Zhejiang and a fourth one under construction at Ningbo. This acquisition will support the rapid development of the SNOW brand in the region, extending its presence in southern Zhejiang.
Mr. Ari Mervis, Managing Director of SABMiller Asia, said: "The SNOW brand is now amongst the leading beer brands in the world and these acquisitions will further develop its national presence in mainland China."
Mr. Long Chen, Managing Director of China Resources Enterprise, Limited said, "Liaoning, Anhui and Zhejiang are all our major existing markets. These acquisitions will enable us to strengthen on our position with wider geographical coverage and lower cost base. It will also optimise our product structure."
Notes to editors:
About SABMiller plc
SABMiller plc is one of the world's largest brewers with brewing interests and distribution agreements across six continents. The group's wide portfolio of brands includes premium international beers such as Grolsch, Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as market-leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller is also one of the largest bottlers of Coca-Cola products in the world.
In the year ended 31 March 2008, the group reported US$3,639 million in adjusted pre-tax profit and revenue of US$21,410 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
About China Resources Snow Breweries Limited
China Resources Snow Breweries Limited was established by the Company 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 about 60 breweries in the Chinese Mainland with a total sales volume of about 6.9 million kiloliters in 2007.
About China Resources Enterprise, Limited
China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchange 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, beverage, food processing and distribution, textile and property investment.
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