* Carlsberg raises stake in Chinese brewer to 60 percent
* Carlsberg hopes to keep increasing its stake - Chongqing
* Now Carlsberg can boost Chongqing profitability - analyst
By Teis Jensen and Adam Jourdan
COPENHAGEN/SHANGHAI, Dec 5 Danish brewer
Carlsberg upped its stake in China's Chongqing
Brewery to 60 percent, strengthening its foothold in
the world's largest beer market by volume, and hopes to increase
its holding further, the Chinese company said.
Asia has become the main battleground for the top four
global brewers - Carlsberg, AB InBev, SABMiller
and Heineken - which need the growing middle
classes in emerging markets to compensate for sluggish sales in
Europe and the United States.
"It was essential for Carlsberg to get the majority stake.
It makes it possible to implement its business strategies and
increase profitability," Sydbank analyst Morten Imsgard said.
As majority shareholder it will be easier for Carlsberg to
implement efficiency programmes to increase profitability, and
integrate the business with its existing breweries in China.
Carlsberg, which inherited a stake in Chongqing Brewery
through its takeover of British brewer Scottish & Newcastle in
2007, raised it in 2010 to become the biggest shareholder in the
Chinese company with 29.7 percent.
On Thursday it completed its purchase of an additional 30.3
percent for 2.9 billion yuan ($476 million).
"With this purchase agreement Carlsberg is taking a step
towards strengthening its strategic investment in Chongqing
Brewery, based upon its positive outlook for the Chinese beer
market," Chongqing Brewery said in a statement sent to the
Shanghai Stock Exchange.
"Carlsberg hopes to continue increasing its stake in
Chongqing Brewery, and hopes this deal will deepen mutual
cooperation between the two firms, lifting the value of
Chongqing Brewery and the investment returns to the
stockholders," the statement added.
The Chinese beer market is estimated to be worth around 451
billion yuan ($74 billion) in 2013 with a volume of 53 billion
litres, analysis agency Euromonitor said.
Carlsberg was the sixth-largest brewer in China in 2012 with
a market share of 2.6 percent, Euromonitor said. Chongqing
Brewery had a market share of 2.3 percent. Carlsberg has its
strongholds in central and western parts of China.
Carlsberg declined to comment until all the purchased shares
are in its deposit, it has paid for them and the deal is finally
closed, a process that could take about a week.
Carlsberg first launched its takeover offer in March, when
Chief Executive Jorgen Buhl Rasmussen called the purchase "an
important step forward in China", and was given the green light
for the deal at the end of October.
Carlsberg's main owner, the Carlsberg Foundation, said in
October that it wanted to drop a rule in its charter that it
must own at least 25 percent of the brewer. That could open the
door for a share issue and further acquisitions in Asia.
Sydbank's Imsgard said however it would be difficult for
Carlsberg to grab other large acquisition targets in China ahead
of other competitors which have more financial muscle.
CR Snow, a joint venture between SABMiller and China
Resources Enterprise, is the largest brewer in China
followed by Tsingtao Brewery, Beijing Yanjing
Brewery and Anheuser-Busch InBev.
Shares in Carlsberg fell 0.3 percent on Thursday, while the
Danish benchmark index fell 0.1 percent.