CR Snow Acquires 49% Equity Stake in Jiangsu Dafuhao Breweries and 100% Equity Stake in Shanghai Asia Pacific Brewery from Heineken-APB
14 July 2011
Further Strengthening its Leading Position in China's Beer Market
- CR Snow is acquiring a 49% equity stake in Jiangsu Dafuhao Breweries and a 100% equity stake in Shanghai Asia Pacific Brewery from Heineken-APB for a total cash consideration of approximately RMB870 million.
- With its major beer brand "大富豪啤酒 BBOSS", Jiangsu Dafuhao Breweries has a strong market position in the central part of Jiangsu Province.
- Shanghai Asia Pacific Brewery produces one of the most famous beer brands in Shanghai, "力波 REEB", which is its major beer brand.
- CR Snow is a market leader in Jiangsu Province with sales volume of 660,000 kiloliters in 2010. Its major market is mainly located in the southern part of the province. Through its acquisition of a 49% equity stake in Jiangsu Dafuhao Breweries, CR Snow will be able to develop with Jiangsu Dafuhao Breweries a business platform that brings together the strengths of both companies so as to create greater returns for shareholders.
- Benefiting from Shanghai Asia Pacific Brewery's extensive distribution network, the acquisition will further strengthen CR Snow's competitive advantage in Shanghai.
- Both acquisitions will further reinforce CR Snow's leading position in China's beer market and pave the way for the sustainable growth of the Company's beer business.
[Hong Kong, 13 July, 2011] China Resources Snow Breweries Limited („CR Snow'), a subsidiary of China Resources Enterprise, Limited (or „the Company') (HKEx: 00291) and a joint venture with SABMiller plc, today announced that it has entered into an agreement with Heineken Asia Pacific Breweries (China) Pte Ltd. („Heineken-APB‟) to acquire a 49% equity stake in Jiangsu Dafuhao Breweries Co., Ltd („Jiangsu Dafuhao Breweries‟) and a 100% equity stake in Shanghai Asia Pacific Brewery Company Limited („Shanghai Asia Pacific Brewery‟) from Heineken-APB. The total cash consideration for the acquisitions amounts to about RMB870 million.
Jiangsu Dafuhao Breweries is a Sino-foreign joint venture which is 51%-owned by Nantong Fuhao Alcohol Industry Co., Ltd and 49%-owned by Heineken-APB. With its major beer brand "大富豪啤酒BBOSS", Jiangsu Dafuhao Breweries has a strong market position in the central part of Jiangsu Province. It owns five breweries in Jiangsu Province with an annual production capacity of over 450,000 kiloliters.
Shanghai Asia Pacific Brewery produces one of the most famous beer brands in Shanghai, "力波 REEB", which is its major beer brand. The production plant of Shanghai Asia Pacific Brewery has an annual
production capacity of 250,000 kiloliters. CR Snow is a market leader in Jiangsu Province with sales volume of 660,000 kiloliters in 2010. Its major market is mainly located in the southern part of Jiangsu Province. The acquisition of an equity stake in Jiangsu Dafuhao Breweries has given a boost to the development of CR Snow‟s business in the entire Jiangsu Province. Meanwhile, benefiting from Shanghai Asia Pacific Brewery‟s extensive distribution network, CR Snow's competitive advantage in Shanghai will be enhanced and its leadership in China as a whole will be strengthened.
Mr. Chen Lang, Chief Executive Officer of China Resources Enterprise, Limited said, "Both acquisitions reaffirm CRE‟s strategy of focusing on building our core businesses, comprising retail, beer, food and beverage. The beer brands of Jiangsu Dafuhao Breweries and Shanghai Asia Pacific Brewery are well-received in Jiangsu Province and Shanghai respectively. The acquisitions will not only further strengthen CR Snow‟s leading position in China‟s beer market, but also pave the way for the sustainable growth of our beer business. The Group will continue to seek and evaluate investment opportunities actively as well as pursuing organic growth in order to expand our market share in China‟s beer market."
Mr. Ari Mervis, Managing Director of SABMiller Asia, said, "The acquisitions of Jiangsu Dafuhao Breweries and Shanghai Asia Pacific Brewery enable CR Snow to further expand its leading presence in China‟s beer market. With Jiangsu Dafuhao Breweries further enhancing CR Snow‟s number one position in the key state of Jiangsu and Shanghai Asia Pacific Brewery increasing our share in the important Shanghai market, they both represent particularly attractive expansion opportunities for CR Snow and will enhance our organic growth in these markets."
The Company entered the beer industry in 1993 and began its partnership with SABMiller, one of the leading brewers in the world, in 1994. CR Snow has grown to be a leader in the industry with a 21% market share in China‟s beer market thanks to its successful acquisition strategy, well-executed consolidation and sustained brand building efforts. In 2010, the sales volume of "雪花 Snow" alone surged 16% year-on-year to approximately 8,413,000 kiloliters, making it the top seller in China for the sixth consecutive year since 2005.
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. In 2010, it operated over 70 breweries in China with a total beer sales volume of about 9.28 million kiloliters. 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.
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 includes global beers 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.
For further information, please contact:
China Resources Enterprise, Limited
Mr. Vincent Tse General Manager Strategic Planning and Investor Relations Dept. Mobile: +852 9861 1983 Fax: +852 2598 8453
Ms. Phoenix Yuen Manager Strategic Planning and Investor Relations Dept. Tel: +852 2829 8412 Fax: +852 2598 8453
This is an SABMiller subsidiary news release, it was first published in its local market on 13/07/2011.