Big brewer SABMiller on Monday launched its offer document for China’s Harbin Brewery and urged the company’s shareholders to accept its offer of HK$4,30 per share.
“SABMiller will ensure a positive future for Harbin Brewery’s brands, breweries and employees, whilst maintaining its strong identity and heritage. We will ensure Harbin Brewery’s continued growth as a powerful force in the Chinese brewing sector and we believe it is in the best interests of Harbin Brewery and its current shareholders to accept our offer,” said SABMiller CE Graham Mackay.
SABMiller’s offer of HK$4,30 per share values Harbin Brewery shares higher than any closing price of the shares since its initial public offering.
The offer is also about 38 times Harbin Brewery’s 2003 earnings and at over four times its 2003 net asset value.
SABMiller said majority ownership of Harbin Brewery offers a compelling and unique strategic fit with SABMiller’s existing joint venture operation, China Resources Breweries, in North East China, where significant geographical overlap already exists.
Once SABMiller has secured a controlling stake in Harbin Brewery it would seek to develop Harbin Brewery’s brands to complement SABMiller’s existing brands so as to build a powerful national portfolio of brands in China.
The group will seek to improve the quality and efficiency of the distribution system by using the increased scale available. The controlling position will also allow SABMiller to maximise the brewing capacity utilisation of China Resources Breweries and Harbin Brewery to ensure that product is brewed closer to the customer, ensuring greater choice and higher quality.
Finally, SABMiller will implement its international performance management systems.
“It is SABMiller’s intention, over time, to align the Harbin Brewery business with that of China Resources Breweries,” the group said in a statement.
SABMiller strongly believes that it can improve the operating environment in North East China without job losses.
Anglo Chinese and ABN AMRO are SABMiller’s financial advisers for the offer. – I-Net Bridge