CR Snow continues expansion in China
SABMiller plc announces that China Resources Snow Breweries Limited ("CR Snow"), its joint venture with China Resources Enterprise, Limited ("CRE"), has entered into an agreement with Asahi Breweries Itochu (Group) Ltd ("Asahi") to acquire from Asahi the remaining 55% equity interest in Hangzhou Xihu Breweries Asahi (Stock) Co Ltd ("Hangzhou Xihu Beer") and the remaining 25% equity interest in Xihu Breweries Asahi (Stock) Co Ltd ("Huzhou Brewery"), for a total cash consideration of approximately US$47m.
Following completion of the transaction, both companies will become wholly-owned subsidiaries of CR Snow. CR Snow acquired its existing 45% equity interest in Hangzhou Xihu Beer on 29 November 2010, and Hangzhou Xihu Beer currently owns a 75% interest in Huzhou Brewery.
The transaction will consolidate CR Snow's position in Zhejiang province, which is one of the largest markets in central China. Lager volumes in Zhejiang in the twelve months to March 2011 were approximately 28m hectolitres, representing a seven per cent increase on the prior year.
Hangzhou Xihu Beer and Huzhou Brewery are in the north of Zhejiang province, where CR Snow is already a market leader. The two companies have a combined production capacity of five million hectolitres per annum and will improve CR Snow's geographical footprint and strengthen its position in Hangzhou, the province's capital city.
The acquisition of the Hangzhou Xihu Beer and Huzhou Brewery follows recent strategic transactions to build CR Snow's presence in key markets and grow value. On 13 July 2011, CR Snow announced that it had acquired Heineken-APB's 49% equity interest in Jiangsu Dafuhao Breweries Co Ltd ("Jiangsu Dafuhao Breweries") and its 100% equity interest in Shanghai Asia Pacific Brewery Company Ltd ("Shanghai Asia Pacific Brewery").
Jiangsu Dafuhao Breweries, in which Nantong Alcohol Industry Co. Ltd will retain its 51% stake, has a strong market position in the Jiangsu province with its major beer brand, BBOSS. It owns five breweries and has an annual production capacity of 4.5m hectolitres. Shanghai Asia Pacific Brewery produces REEB, one of the most famous beer brands in Shanghai. Through its production plant in the region, the company produces c. 2.5m hectolitres annually.
Ari Mervis, Chairman of CR Snow and Managing Director of SABMiller Asia, commented: "SABMiller is committed to growing its presence in China through its joint venture with CRE. This latest transaction increases our production capacity to serve the thriving Zhejiang province. The cumulative impact of our recent transactions across China supports our confidence in this growing market with strong prospects. CR Snow is putting itself in the best position to tap into the profit pool and widen the gap between the company and its competition."
Mr. Chen Lang, Chief Executive Officer of China Resources Enterprise, Limited said, "Xihu beer is widely received in the north of Zhejiang Province and has a sound track record and huge growth potential. The acquisition will not only further strengthen CR Snow's leading position in China's beer market, but will also pave the way for the sustainable growth of our beer business. After the acquisition of the remaining stakes in Hangzhou Xihu Beer, the Group will continue to actively seek and evaluate investment opportunities in order to further expand its businesses, thereby strengthening the leading positions of its core businesses of retail, beer, food and beverage."
Snow is the largest beer brand in China (and in the world) by volume and CR Snow had a 21% share of the Chinese beer market with sales of more than 92m hectolitres in 2010.
About SABMiller plc
SABMiller plc is one of the world's largest brewers with brewing interests and distribution agreements across 75 countries in six continents. The group's wide portfolio includes global brands such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller plc is also one of the world's largest bottlers of Coca-Cola products
In the year ended 31 March 2011, the group reported US$4,491 million adjusted pre-tax profit and group revenue of US$28,311 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. In 2010, it operated over 70 breweries in China with a total beer sales volume of about 92 million hectolitres. It is the largest beer company in China by sales volume.
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 including retail, beer, food and beverage in China.
t: +44 20 7659 0100
Head of Media Relations
t: +44 7799 894265
Business Media Relations Manager
t: +44 7425 621030
This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of SABMiller plc (the "Company") or any of its affiliates in any jurisdiction or an inducement to enter into investment activity.
This announcement includes "forward-looking statements". These statements may contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products and services) are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Any information contained in this announcement on the price at which the Company's securities have been bought or sold in the past, or on the yield on such securities, should not be relied upon as a guide to future performance.