China: SAB Miller to buy breweries

China Resources Snow Breweries - a joint venture between SAB Miller and China Resources Enterprise - is to buy Kingway Brewery’s brewing facilities for a total cash consideration of RMB 5.38bn (US$864m).

The Kingway brewery business comprises seven breweries, four of which are in Guangdong province. There are also breweries in Sichuan and Shaanxi provinces and Tianjin municipality. Total annual production capacity of the facilities is 14.5 million hectolitres and in 2011, the business sold 9.3 million hectolitres of beer.

Ari Mervis, managing director of SAB Miller Asia Pacific, said: “The acquisition of Kingway gives us greater access to high growth and attractive regional markets in China, thereby enhancing CR Snow’s competitive position.”

Chen Lang, chairman of China Resources Enterprise said: "Kingway is a widely recognised brand and quality asset and enjoys a strong market share with an extensive sales network and established manufacturing infrastructures in China, especially in Guangdong province. We are delighted to have Kingway join the CRE family. The transaction not only strengthens our production capacity and economies of scale, but also further optimizes the sales network of CR Snow in China."

The transaction is subject to regulatory approvals and final approval of Kingway's shareholders.