South African brewer SABMiller said on Thursday that it will not proceed with its voluntary offer of HK$4,30 for shares in China’s Harbin Brewery and that it will accept the offer of HK$5,58 that Anheuser-Busch announced it will be making for shares in Harbin.
SABMiller said in a statement that Anheuser-Busch will pay it US$211-million and the company will realise a substantial profit over the price it paid to purchase the stake in Harbin Brewery in July 2003.
The South Africa-based brewer said it believes that the offer price by AB of HK$5,58 more than fully values the potential of the company and it is in the best interests of SABMiller and its shareholders to accept.
SABMiller has made clear since announcing its offer for Harbin Brewery that Harbin Brewery could benefit from becoming a part of SABMiller’s China strategy through the potential synergies to be derived by aligning Harbin Brewery with its interest in China Resources Breweries. However, it had also indicated that Harbin Brewery was not an essential asset at any price.
SABMiller already has an established position in China and will continue to make further investments to strengthen this through its joint venture interest in China Resources Breweries. CRB already owns 32 breweries throughout China and leading local and regional beer brands, which have the potential to become national brands over time.
CRB will continue to pursue solid organic growth and will consider other asset acquisitions if the value is appropriate and it strengthens CRB’s strategic interests in China.
Commenting on the announcement SABMiller CEO Graham Mackay said, “We remain fully committed to the Chinese beer market and we must evaluate every potential acquisition on its merits. We believe that the AB offer price for Harbin more than fully values the business, even after taking into account the significant
synergies uniquely available to us.”
“We have a successful ten year history of expansion and profitability in China and a clear strategy to grow the business through CRB, which I am pleased to say remains on course.”
At 1.10pm on the JSE Securities Exchange South Africa, SABMiller’s shares were quoted up 169 cents, or 2,19%, at R78,90. Around midday the share was quoted at R78,80. – I-Net Bridge