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SABMiller joint-venture acquires Lion Nathan breweries in China for USD154m

15 September 2004

Ref: 22/04

SABMiller joint-venture acquires Lion Nathan breweries in China for US$154m

SABMiller plc’s Chinese joint-venture, China Resources Breweries Limited (‘CRB’), announces that it has acquired the Chinese brewing interests of Lion Nathan for an equity value of US$71 million and estimated assumed debt of US$83 million. The acquired business consists of three breweries employing over 1,000 people in the economically developed Yangtze River Delta region (Southern Jiangsu province) close to Shanghai. The breweries have installed capacity of 5.16 million hectolitres with sales volumes of 2.19 million hectolitres forecast for the year ending September 2004. In the six months to March 2004, spanning the low-consumption winter season, Lion Nathan’s Chinese business reported an EBITA loss of A$7.0 million on sales of A$22.8 million. Volumes increased by 63 per cent to 0.5 million hectolitres, with organic volumes increasing 54 per cent.

The acquired company’s brands include the mainstream beers Taihushui, Linkman and Rheineck which are distributed in the Yangtze River Delta. In this region the company has an estimated market share of 20% and leading positions in and around the cities of Wuxi, Suzhou, Changzhou and Nanjing.

André Parker, Managing Director of SABMiller Africa & Asia commented:

“This acquisition extends CRB’s footprint in the strategically important Jiangsu and Shanghai area with combined market volumes of 16 million hectolitres and above average market pricing. The breweries’ excellent geographic fit with CRB’s existing operations in neighbouring Anhui, Zhejiang and Hubei offers potential synergies in marketing, procurement and logistics. In addition, the business is expected to benefit from improving sales mix within the existing brand portfolio and by the accelerated introduction of Snow. As a result we are confident in CRB’s ability to significantly enhance profitability in the short to medium term.”

Frank Ning, Chairman of China Resources Enterprise, said:

“Since the beginning of this year, our production capacity has already expanded by about 30% through acquisitions at reasonable cost. This acquisition, being the third this year, is another major step for us to consolidate our leading position in the mainland brewery market and develop a complete national distribution network for Snow. It has provided us not just a portfolio of strong brands in Jiangsu, where we have not had operations before, but also a platform for our business to grow further in the Yangtze River Delta region.” CRB is a joint-venture with SABMiller’s Chinese partner, China Resources Enterprise Limited. The acquisition confirms CRB as the second largest brewer in China, with a market share of 12% and production capacity of 55.8 million hectolitres across 36 breweries. In the year to March 2004, CRB reported sales volumes of 25.8 million hectolitres, including 7 million hectolitres of Snow. SABMiller entered the China market in 1994 and is one of few profitable foreign brewers operating in the country.

Ends

About SABMiller plc
SABMiller plc is one of the world’s largest brewers, with 2003/04 lager sales volumes in excess of 137 million hectolitres. It has a brewing presence in over 40 countries across four continents and a portfolio of strong brands and leading market shares in many of the countries in which it has brewing operations. Outside the USA, SABMiller plc is one of the largest bottlers of Coca-Cola products in the world.

In the year ended 31 March 2004, the group generated US$1,391million pre-tax profit from a turnover of US$12,645 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.

About China Resources Breweries Limited
China Resources Breweries Limited was established in 1994 and is engaged in the production, sales and marketing of beer and beverages in China. Its shareholders are China Resources Enterprise, Limited and SABMiller plc, the third largest brewing group in the world. China Resources Enterprise Limited has a 51% interest in China Resources Breweries Limited while SABMiller plc holds a 49% interest. It currently operates 33 breweries in the Chinese Mainland with total sales volume of 25.8 million hectolitres in 2003.

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 also one of the constituent stocks of the Hang Seng Index in Hong Kong and Hang Seng London Reference Index. The Group has a well-diversified portfolio of businesses in both Hong Kong and the Chinese Mainland, with principal activities being retail, beverage, food processing and distribution, textile and petroleum distribution.

This announcement is available on www.sabmiller.com

For further information:

Contacts:

Sue Clark
Director of Corporate Affairs
Tel: + 44 (0) 20 7659 0184
SABMiller plc
Mob: + 44 (0) 7850 285471

Gary Leibowitz
Vice President, Investor Relations
Tel: +44 (0) 20 7659 0119
SABMiller plc
Mob: +44 (0) 7717 428540

Nigel Fairbrass
Head of Corporate Communications (Finance)
Tel: +44 (0) 20 7659 0105
SABMiller plc
Mob: +44 (0) 7799 894265

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