SABMiller joint venture announces first acquisition in Shandong Province
13 March 2009
China Resources Snow Breweries Limited ("CR Snow"), SABMiller's joint venture in China with China Resources Enterprise, Limited ("CRE"), announces that it has agreed to acquire the brewing assets of Shandong Hupo Brewery ("Hupo Brewery") through the formation of a joint venture in which it will initially own a 90% equity interest. CR Snow will acquire the remaining 10% within three years after the joint venture is formed. The total cash consideration for the acquisitions amounts to approximately $42 million.
Hupo Brewery is situated in Zouping county, northern Shandong Province. More beer is consumed in Shandong Province than any other province in China and Zouping county serves as a transportation hub to neighbouring major cities such as Binzhou, Jinan, Zibo and Dongying.
Hupo Brewery has an annual production capacity of 2.7 million hectolitres and upon completion of the acquisition, approximately $8 million will be spent on technology upgrades to the existing facilities in order to increase its capacity to 3 million hectolitres and ensure the production requirements are sufficient to produce the brand SNOW.
On 26th February 2009, CR Snow announced that it had agreed to acquire three breweries in each of Anhui, Liaoning and Zhejiang Provinces in three separate transactions.
Mr. Ari Mervis, Managing Director of SABMiller Asia, said; "SNOW continues to enjoy good growth in China and the significant import sales volume that the brand already enjoys in the province certainly justifies the establishment of a production base here. The brewery has a strategic location in northern Shandong and is well connected by highways to the other major cities in this region."
Mr. Long Chen, Managing Director of China Resources Enterprise, Limited said, "The acquisition of Hupo Brewery will raise our market presence in Shandong Province which is currently the largest beer sales province of China. It is a major step for us to complete the distribution network in the coastal regions of eastern China."
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 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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