Brewer eyes competitors after Snow Beer buyout

China's top brewer could start acquiring smaller competitors to cement its leading position in the Chinese beer market, after buying out venture partner SABMiller Plc and taking full ownership of the world's best-selling Snow Beer.


China Resources Beer Holdings Co on Wednesday agreed to buy SABMiller's stake in Snow Breweries for $1.6 billion, smoothing the way for a takeover of its partner by Anheuser-Busch InBev NV. The Hong Kong-listed unit of China Resources Holding Co currently owns 51 percent of the venture.


"Once the SABMiller deal is completed, they may start to buy some small breweries again," said Bloomberg Intelligence analyst Duncan Fox. Potential targets include Beijing Yanjing Brewery Co, China's fourth-biggest brewer by volume, although deals would be subject to balance sheet constraints, he said.


Yanjing, backed by the Beijing municipal government, plans to sell about a 20 percent stake to a foreign strategic partner, people with knowledge of the matter said. Yanjing Beer denied those plans.


Small regional breweries with shares of around 2 percent or less make up the bulk of China's expanding beer consumption, while beermakers including China Resources and Tsingtao Brewery Co lead nationally, according to data from Euromonitor International.


Shares of Chinese brewers rose, with Shenzhen-listed Yanjing gaining as much as 1.5 percent to 6.85 yuan ($1.05). China Resources Beer and Tsingtao advanced as much as 3.84 percent and 2.04 percent, respectively, in Hong Kong.


The article transsshipment from China Daily