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SAB - SABMiller plc - CR snow continues expansion in China
JSEALPHA CODE: SAB
ISSUER CODE: SOSAB
ISIN CODE: GB0004835483
CR Snow continues expansion in China
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 Asahi Breweries Itochu (Group) Ltd ("Asahi") to acquire
from Asahi the remaining 55% equity interest in Hangzhou Xihu Breweries Asahi
(Stock) Co Ltd ("Hangzhou Xihu Beer") and the remaining 25% equity interest in
Xihu Breweries Asahi (Stock) Co Ltd ("Huzhou Brewery"), for a total cash
consideration of approximately US$47m.
Following completion of the transaction, both companies will become wholly-owned
subsidiaries of CR Snow. CR Snow acquired its existing 45% equity interest in
Hangzhou Xihu Beer on 29 November 2010, and Hangzhou Xihu Beer currently owns a
75% interest in Huzhou Brewery.
The transaction will consolidate CR Snow`s position in Zhejiang province, which
is one of the largest markets in central China. Lager volumes in Zhejiang in the
twelve months to March 2011 were approximately 28m hectolitres, representing a
seven per cent increase on the prior year.
Hangzhou Xihu Beer and Huzhou Brewery are in the north of Zhejiang province,
where CR Snow is already a market leader. The two companies have a combined
production capacity of five million hectolitres per annum and will improve CR
Snow`s geographical footprint and strengthen its position in Hangzhou, the
province`s capital city.
Chinese expansion
The acquisition of the Hangzhou Xihu Beer and Huzhou Brewery follows recent
strategic transactions to build CR Snow`s presence in key markets and grow
value. On 13 July 2011, CR Snow announced that it had acquired Heineken-APB`s
49% equity interest in Jiangsu Dafuhao Breweries Co Ltd ("Jiangsu Dafuhao
Breweries") and its 100% equity interest in Shanghai Asia Pacific Brewery
Company Ltd ("Shanghai Asia Pacific Brewery").
Jiangsu Dafuhao Breweries, in which Nantong Alcohol Industry Co. Ltd will retain
its 51% stake, has a strong market position in the Jiangsu province with its
major beer brand, BBOSS. It owns five breweries and has an annual production
capacity of 4.5m hectolitres. Shanghai Asia Pacific Brewery produces REEB, one
of the most famous beer brands in Shanghai. Through its production plant in the
region, the company produces c. 2.5m hectolitres annually.
Ari Mervis, Chairman of CR Snow and Managing Director of SABMiller Asia,
commented: "SABMiller is committed to growing its presence in China through its
joint venture with CRE. This latest transaction increases our production
capacity to serve the thriving Zhejiang province. The cumulative impact of our
recent transactions across China supports our confidence in this growing market
with strong prospects. CR Snow is putting itself in the best position to tap
into the profit pool and widen the gap between the company and its competition."
Mr. Chen Lang, Chief Executive Officer of China Resources Enterprise, Limited
said, "Xihu beer is widely received in the north of Zhejiang Province and has a
sound track record and huge growth potential. The acquisition will not only
further strengthen CR Snow`s leading position in China`s beer market, but will
also pave the way for the sustainable growth of our beer business. After the
acquisition of the remaining stakes in Hangzhou Xihu Beer, the Group will
continue to actively seek and evaluate investment opportunities in order to
further expand its businesses, thereby strengthening the leading positions of
its core businesses of retail, beer, food and beverage."
Snow is the largest beer brand in China (and in the world) by volume and CR Snow
had a 21% share of the Chinese beer market with sales of more than 92m
hectolitres in 2010.
-ends-
Notes to editors
About SABMiller plc
SABMiller plc is one of the world`s largest brewers with brewing interests and
distribution agreements across 75 countries in six continents. The group`s wide
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, Castle, Miller Lite, Snow and Tyskie. SABMiller plc is also one of the
world`s largest bottlers of Coca-Cola products
In the year ended 31 March 2011, the group reported US$4,491 million adjusted
pre-tax profit and group revenue of US$28,311 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 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.
In 2010, it operated over 70 breweries in China with a total beer sales volume
of about 92 million hectolitres. It is the largest beer company in China by
sales volume.
About China Resources Enterprise, Limited
China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchange
and is one of the constituent stocks of the Hang Seng Index in Hong Kong. The
Group focuses on the consumer businesses including retail, beer, food and
beverage in China.
Enquiries
SABMiller plc
t: +44 20 7659 0100
Nigel Fairbrass
Head of Media Relations
SABMiller plc
t: +44 7799 894265
Beth Longcroft
Business Media Relations Manager
SABMiller plc
t: +44 7425 621030
This announcement does not constitute an offer to sell or issue or the
solicitation of an offer to buy or acquire securities of SABMiller plc (the
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enter into investment activity.
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Date: 02/08/2011 08:02:51 Supplied by www.sharenet.co.za
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