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Joined: 23 Mar 2005 Posts: 173 Location: United Kingdom
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Posted: Fri Feb 03, 2006 10:15 am Post subject: InBev toasts £424m Sedrin deal to become top brewer in China |
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InBev toasts £424m Sedrin deal to become top brewer in China
By Ross Tieman in Toulouse
29 January 2006
BELGIAN’s InBev has stolen a march on its rivals in the race to become China’s biggest brewer. The group, already the world’s largest brewer with brands such as Stella Artois, Beck’s, Bass, Brahma and Skol, last week cut a deal to buy the Fujian Sedrin Brewery Company outright for E614m ($755m, £424m).
The purchase of Sedrin, with its stronghold in the south-east coastal provinces of Fujian and Jiangxi, will make InBev the second-largest brewer in China, now the world’s biggest beer market, ahead of the US.
Added to existing breweries acquired since its China entry in 1997, the deal gives InBev 12% of total Chinese beer sales, only one point behind Tsingtao Brewery, quarter-owned by America’s Anheuser-Busch, and ahead of China Resources Snow Breweries, controlled 49% by South Africa’s SABMiller.
The deal also consolidates InBev’s powerful foothold in the south-eastern coastal cities, where by the year’s end it will control 30 breweries producing 15.6m hectolitres of beer annually. And the Sedrin brand will become one of InBev’s five biggest worldwide. The race to acquire capacity and brands in China is unsurprising, given stagnant or declining beer sales in western Europe and the US.
With 291m hectolitres of beer consumed in 2004, the Chinese are rapidly increasing their consumption as they grow richer. They drink about 22 litres each a year compared to 121 litres in beer capital Germany. Over the next 15 years, InBev reckons Chinese boozers will account for 44% of the global increase in beer consumption. Chinese breweries are admirably profitable. The Sedrin Brewery company has 45% of the beer market in Fujian Province and 18% in Jiangxi Province.
Despite paying 13 times enterprise value for Sedrin, InBev reckons the deal will bolster its earnings as soon as it is completed at the end of the year.
http://www.thebusinessonline.com/Stories.aspx?InBev%20toasts%20%C2%A3424m%20Sedrin%20deal%20to%20become%20top%20brewer%20in%20China&StoryID=5B561C0D-008C-431E-91DC-20340D89EBBA&SectionID=BA48E3D7-CCB9-4976-883F-EE19F9206FB3 |
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