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SABMiller joint venture to acquire Blue Sword minorities

4 January 2007

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 a 38% equity interest in 14 breweries based in the Sichuan province in South West China (together the “Sichuan Breweries”) for a total cash consideration of US$320 million.  The remaining 62% equity interest in the Sichuan Breweries is already owned by CR Snow.  As part of the transaction, CR Snow will also acquire the rights to the “Blue Sword” trademarks, as well as acquiring a 100% equity interest in the Guizhou Waterfall Brewery Limited (“Blue Sword Guizhou”) in Guiyang City, which has installed capacity of 800,000 hectolitres.

The transaction will be effected via the acquisition of a 100% interest in Blue Sword (Group) Company Limited or “Blue Sword Group”, a holding company located in the Shifang City in the Sichuan province. Prior to completion of the transaction, various non-brewery related assets held by the Blue Sword Group will be transferred out of the company. For the year ended 31 December 2005, unaudited net profit attributable to the assets subject to the acquisition amounted to US$12.4 million, up c. 40% on the previous year.

The Sichuan Breweries joint-venture was formed in October 2001 through a strategic agreement between CRE Beverage Ltd (now named as China Resources Snow Breweries Limited) and Blue Sword (Group) Company Limited, creating the leading brewer in Sichuan. The brewing operations in the region at the time consisted of 12 plants with a further two breweries subsequently added. 

Completion of the transaction is expected to take place in early 2007, following satisfaction of pre-closing conditions.

Mr. André Parker, Managing Director of SABMiller Africa & Asia, said; “This acquisition further demonstrates CR Snow’s commitment to invest in prominent local brands which not only complements our national branding strategy, but strengthens our leading positions throughout regional markets.”

Mr. Mark Chen, Managing Director of China Resources Enterprise, Limited said;
“We are very pleased that we can consolidate our brewery interests in Sichuan.  Sichuan is a major profit centre for CR Snow and its contribution has been rapidly rising on expanding market share.  The acquisition will boost our operational efficiency in the western and south-western regions and strengthen our brand portfolio, underscoring our confidence for stronger returns in the coming years.”

Sichuan province has a population of over 87 million inhabitants and is an area where beer demand is already strong. The Sichuan Breweries achieved a market share of c. 70% in the province last year and are well positioned to capitalise further on increasing demand with additional capacity production facilities planned. Distribution channels are also well established with an extensive sales network that covers neighbouring regions such as Chongqing, Yunnan, Guizhou, Tibet, Shaanxi and Gansu.

Guizhou is a mountainous province, bordered to the north by Sichuan and with a relatively small population of 39 million people. Despite low current beer consumption, there is clear opportunity for future growth, particularly through improving access to the SNOW brand in the local market. At present, CR Snow does not have a plant in the region, though production of SNOW at the Guizhou brewery will commence on completion.

Annual production capacity at the Sichuan Breweries in 2005 was 14 million hectolitres. Construction of additional capacity is currently underway and will be completed in mid-2007, which will add a further 1.6 million hectolitres to total capacity. The annual production capacity at the Guizhou brewery was 800,000 hectolitres over the same period.


Notes to editors

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.  The company is engaged in the production, sales and marketing of beer and beverages 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 more than 40 breweries in the Chinese Mainland with a total sales volume of about 39.5 million hectolitres in 2005.

About SABMiller plc

SABMiller plc is one of the world’s largest brewers with brewing interests or distribution agreements in over 60 countries across five continents. The group’s brands include premium international beers such as Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as an exceptional range of market leading local brands.  Outside the USA, SABMiller plc is also one of the largest bottlers of Coca-Cola products in the world.
In the year ended 31 March 2006, the group reported US$15,307 million in revenues and profit before tax of US$2,453 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.

About China Resources Enterprise, Limited

China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchange and is also traded on SEAQ International of the London Stock Exchange.  It is 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.

This announcement is available on

SABMiller plc 
Tel: +44 20 7659 0100
Sue Clark
Director of Corporate Affairs
Tel: +44 20 7659 0184
Gary Leibowitz
Senior Vice President, Investor Relations
Tel: +44 20 7659 0119
Nigel Fairbrass
Head of Media Relations 
Tel: +44 20 7659 0105

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