By Donny Kwok and Alison Leung
HONG KONG Feb 5 SABMiller, the world's
second-biggest brewer, is to expand further into high-growth
regional markets in China after a local joint venture agreed to
buy Kingway Brewery assets for 5.38 billion yuan ($863
Asia's $258 billion beer market is growing twice as fast as
the rest of the world, leading to rising competition and
expectations of more industry deals in the region this year.
CR Snow, a brewing joint venture between SABMiller and
conglomerate China Resources Enterprise, will see its
capacity rise 8.5 percent with the acquisition of seven
breweries that Kingway put up for sale early last year.
Four are in Guangdong province, one of China's
fastest-growing and most affluent regions, SABMiller said on
Tuesday. The other breweries are in Sichuan, Shaanxi and
SABMiller said last month lager sales fell in China in the
final three months of 2012 as the country's coldest winter in 28
years hit demand and, as a consequence, the group's growth.
"The acquisition of Kingway (assets) gives us greater access
to high growth and attractive regional markets in China, thereby
enhancing CR Snow's competitive position," SAB Asia Pacific
managing director Ari Mervis said.
Kingway, which is to change its name to Guangdong Land
Holdings Ltd, said at a news conference in Hong Kong it was to
focus on property development and investment in China.
Kingway said in January 2012 it planned to sell brewing
operations in southern China as its profit was being hit by
competition and rising costs.
Beijing Yanjing, China's fourth-largest domestic
brewer, had been in advanced talks to strike a deal with Kingway
last year, after beating Anheuser-Busch InBev NV, the
world's biggest brewer, in the final round of bidding, sources
previously told Reuters. That agreement failed.
The price of the Kingway deal includes a small portion of
loans and debt, the companies said.
J.P. Morgan acted as financial adviser to the buyer.
SABMiller shares were up 0.9 percent at 1530 GMT, outpacing
a 0.6 percent gain in the broader London market.
SABMiller has a 49 percent stake in the CR Snow joint venture.