Beijing Yanjing Brewery Co. Ltd. (000729.SZ), one of China’s largest brewers, is to acquire a 100% stake in Xingtai Tianniu Beer Co. Ltd. for RMB 107.72 million in a bid to build growth in the country’s emerging beer markets.

Tianniu Beer, based in southern Hebei province, has a registered capital of RMB 9 million and an annual production capacity of 100,000 kiloliters.

Yanjing Brewery said it aims to tap into more emerging markets after achieving solid sales in Guangdong, Xichuan and Xinjiang as well as its home base of Beijing.

Yanjing Brewery

Yanjing Brewery booked RMB 6.19 billion in first-half sales, up 22.91% year-on-year; beer sales volume reached 2.72 million kiloliters, up 14.8% y-o-y.

In the first 6 months, the brewer sold 210,000 kiloliters of beer in Guangdong, up 10.53% y-o-y; beer sales in Sichuan and Xinjiang reached 80,000 tons and 60,000 tons, respectively, up 45.5% and 46.3% y-o-y.

Yanjing Brewery’s Kunming, Yunnan-based production plant also came into operation earlier this year, producing 50,000 kiloliters of beer in the first half.

The Beijing-based brewer’s takeover of Tianniu Beer is the latest in a series of acquisitions in the highly fragmented domestic beer industry since the beginning of 2011.

By tapping into surrounding Hebei province, Yanjing Brewery hopes to entrench its position in the North China market.

Big beer producers are gearing up to buy smaller rivals to enrich their assets in the face of ever-increasing competition in this sector.