China Resources Snow Breweries Limited (or “CR Snow”), a subsidiary of China Resources Enterprise, Limited (or “The Company”) and a joint venture with SABMiller plc, announced that it has agreed to acquire three breweries in each of Anhui, Liaoning and Zhejiang Provinces in three separate transactions. The total investment cost for the three acquisitions is about RMB 749 million, which includes a cash consideration of about RMB633 million.
CR Snow has agreed to acquire the respective brewing assets in ???????????? (“Anqing Tianzhu Beer Company Limited” or “Tianzhu Beer”), ???????????? (“Liaoning Songlin Brewery Group Company Limited” or “Songlin Brewery”) and ?????????? (“Zhejiang Luck Beer Company Limited” or “Luck Beer”) through three newly-formed subsidiaries in which it will own 80%, 85% and 100% equity interests respectively. All three breweries will undergo technology upgrade to their existing facilities in order to align with the production requirements for “SNOW”. Upon conclusion, they will add a total of about 468,000 kiloliters to CR Snow’s existing production capacity of about 11.7 million kiloliters.
Tianzhu Beer is situated at Anqing, a historic city at the south-western region of Anhui Province. It has an annual production capacity of about 98,000 kiloliters and a sales volume of about 40,000 kiloliters in 2007. At present, CR Snow has eight breweries in Anhui Province and is the leading brewer in the province. The acquisition will enhance the operational efficiency in southern Anhui and further consolidate the substantial share in the province.
Songlin Brewery has two plants at Chaoyang and Jianping with a total sales volume of approximately 105,000 kiloliters in 2007. Its combined annual production capacity of 208,000 kiloliters will be increased to 250,000 kiloliters upon technology upgrade after acquisition. Songlin Brewery will generate synergies with CR Snow’s existing breweries at Huludao and Panjin, cementing a strong network in western Liaoning. It will also provide a foothold for expansion into the central part of Inner Mongolia. Currently, CR Snow is the largest brewer in Liaoning Province with nine breweries.
Luck Beer is located at Yuhuan county, Taizhou, an economically prosperous coastal city in central Zhejiang. It has an annual production capacity of about 120,000 kiloliters and a sales volume of about 33,000 kiloliters in 2007. CR Snow currently has three breweries in northern Zhejiang and a fourth one under construction at Ningbo. This acquisition will support the rapid development of “SNOW” in the region, extending its presence in southern Zhejiang.
Mr. Long Chen, Managing Director of China Resources Enterprise, Limited said, “Liaoning, Anhui and Zhejiang are all our major existing markets. These acquisitions will enable us to strengthen our position with wider geographical coverage and lower cost base. It will also optimise our product structure.” Mr. Ari Mervis, Managing Director of SABMiller Asia, said, “The SNOW brand is now amongst the leading beer brands in the world and these acquisitions will further develop its national presence in mainland China.”
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. 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 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.
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.