Heineken-APB Completes Divestment of Stake in Kingway Brewery

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•Divestment is in line with APB’s China strategy
•Intensifies participation in the premium segment
Asia Pacific Breweries Limited (APB) today announced that Heineken-APB (China) Pte Ltd (HAPBC) has completed the sale of 365,767,453 ordinary shares in Kingway Brewery Holdings Limited (Kingway Brewery) to GDH Limited (GDH), the controlling shareholder of Kingway Brewery. The transaction was completed at RMB1.08 billion (approximately S$205 million based on current exchange rate), of which S$72.4 million will be recorded as exceptional income. By virtue of its 50% stake in HAPBC, APB’s share will be S$36.2 million.
Mr Roland Pirmez, Chief Executive Officer, APB, commented, “The divestment is consistent with our strategy to intensify our participation in the premium segment of the China beer market. Though we may have divested our stake in Kingway Brewery, we remain committed to the Chinese beer market, particularly in South China where we will soon be opening a new brewery in Guangzhou. Our motivation is to keep ensuring that our prized beer brands, Tiger and Heineken, stay as attractive premium offerings to keep improving our organic growth and profitability.”
The Chinese beer market grew 6.3% to 448 million hectolitres in 2010. Capitalising on the rising affluence and growth opportunities in China, the Group has been actively pursuing the growing premium segment of the China beer market with international beer brands, Tiger and Heineken. Apart from strategic brand investments and marketing, the last few years also saw the Group continually building on and extending its distribution in China.
HAPBC owns a brewery in Shanghai and Hainan. In FY2010, APB’s operations in China broke-even, turning around from a loss of S$5.9 million as reported in FY2009.