Brewery to make big purchase
( 2003-07-29 08:04) (China Daily)
Beijing Yanjing Brewery, China's third-largest beer maker, said yesterday it
will spend 362.4 million yuan (US$43.8 million) on a 38.15 per cent stake in a
regional producer, the Huiquan Beer Group Co.
The acquisition still needs
to get the nod from the China Securities Regulatory Commission, the country's
securities market watchdog, as both parties are listed companies.
Through
the deal, Yanjing will become the largest shareholder in the Huiquan Beer Group
Co, the biggest beer maker in the eastern province of Fujian.
This is a
well thought out measure against the acute challenges from the foreign brewers,
said Li Fucheng, the president of Yanjing.
The move will also help
Yanjing build up a comprehensive network in southeastern China and give it a
springboard to enter Taiwan Province, which is just off the coast of Fujian, Li
said.
China's largest beer maker Tsingtao has already entered the Taiwan
market and is performing well.
Huiquan sold 410,000 tons of beer in 2002,
which were valued 900 million yuan (US$108.7 million).
As a listed
company, Huiquan issued a profit warning for the first half year as it had faced
difficulties amid intense competition in the sector and as the SARS (severe
actue respiratory syndrome) outbreak hit sales.
Yanjing has been one of
China's most successful beer firms and this is Yanjing's 15th acquisition since
1999.
The Beijing-based company sold 2.1 million tons of beer last year
and saw revenue rise by 21 per cent to about 2.8 billion yuan (US$338.3
million).
Foreign beer makers have been going on an acquisition spree in
China's fragmented beer market, hoping to gain a foothold in the world's fastest
growing market.
The giants, including Carlsberg, SABMiller and
Anheuser-Busch, now choose to tie up with local partners -- a new approach after
they bogged into losses in setting up their own plants in the early
1990s.
The latest deal was made by SABMiller, the world's second-largest
beer maker, who bought close to 30 per cent of China's fourth largest beer maker
Harbin Brewery Group for HK$675 million (US$87
million).
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