Anheuser-Busch, the American brewer behind Budweiser, yesterday raised the stakes in the takeover battle for Chinese beer-maker Harbin with a $720m (£400m) bid for the company.
That tops the $550m from SABMiller, the London-based brewer behind brands including Peroni and Pilsner Urquell. The SABMiller offer was the first attempt at a hostile takeover of a Chinese company by a foreign firm.
The two have been vying for control of Harbin since early May when Anheuser-Busch bought a 29% stake in the company.
Anheuser-Busch launched its latest offer after paying almost $50-million to raise its stake in Harbin to 36%. The increased stake triggered an automatic takeover offer under the rules of the Hong Kong stock exchange.
Harbin had no comment. But Stephen Burrows, Anheuser-Busch chief executive, said the Harbin board was supporting his company’s bid.
SABMiller acquired a near 30% stake in Harbin last year. The company had no immediate response to the Anheuser-Busch bid but at worst it will bank a profit of $124-million on its investment.
The Anheuser-Busch offer values Harbin at HK$5,58 a share, compared with the SABMiller offer of HK$4,30.
Anheuser-Busch has aggressively targeted the fast-growing Chinese market. The company holds a 9,9% stake in China’s biggest brewery, Tsingtao, and has a deal on the table to lift that to 27% in the next few years. It owns 97% of the Budweiser Wutan International Brewing company, which produces Budweiser for the domestic market.
The company said the offer for Harbin was ”consistent with our stated strategy of investing in leading brewers in growth countries”.
SABMiller already has a 49% stake in the second largest beer maker in the country, China Resources Brewery, and hoped to merge it with Harbin.
Harbin is China’s fourth largest brewer and is little known outside its home territory in the north-east. Its leading brand is called Hapi. Some analysts said the offer price was too high but the value placed in the potential for the Chinese market won out. Anheuser-Busch shares rose 26 cents to $53,53 in New York.
The Chinese beer market is growing at 8% a year and is worth about $6-billion. Consumption per capita remains low by international standards, representing big growth opportunities and attracting foreign investment. Heineken, Carlsberg and Scottish & Newcastle have poured money into China.
Shares in Harbin have increased by 58% since the two large brewers began to wrestle for control of the business.
Anheuser-Busch has offered to invest $8-million in a fund to promote economic development in the city of Harbin, where the brewer is based. – Guardian Unlimited Â