CR Snow acquires stakes in rival firms
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Shanghai Daily, August 3, 2011
China Resources Snow Breweries Ltd will acquire remaining stakes in smaller home rivals Hangzhou Xihu Breweries Asahi Co and Huzhou Brewery for a total of US$47 million.
CR Snow, a joint venture between retail conglomerate China Resources Enterprise Ltd and London-based SABMiller Plc, will buy the 55 percent stake it didn't own in Hangzhou Xihu and the rest 25 percent equity in Huzhou Brewery from Asahi Breweries Itochu Ltd, SABMiller said in a statement posted on its website yesterday.
Both companies will then become wholly-owned subsidiaries of CR Snow.
The deal will enable CR Snow to increase the number of brewers to eight and consolidate its position in Zhejiang Province.
"This latest transaction increases our production capacity to serve the thriving Zhejiang Province," said Ari Mervis, chairman of CR Snow and managing director of SABMiller Asia.
According to market research firm Euromonitor, Snow is China's largest beer brand and CR Snow had a 21 percent market share in China by volume, followed by Tsingtao's 14 percent and AB InBEV's 11 percent. Last year, CR Snow sold more than 92 million hectoliters in China.
The brewer has been on a buying spree in China this year. In July, CR Snow said it would acquire Heineken-APB's 49 percent equity in Jiangsu Dafuhao Breweries and its 100 percent equity interest in Shanghai Asia Pacific Brewery Co.
"What CR Snow has been doing signals its intention to dominate China's beer market to earn a bigger profit," said Liu Jinhu, an analyst at Guohai Securities Co.
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