Interbrew buys up Zhejiang brewer

- Last updated on GMT

Interbrew has acquired a 70 per cent controlling interest in
Zhejiang Shiliang Brewery Company, located in the Yangtze Delta,
strengthening its leading in China's Zehjiang province.

Interbrew​ says that the €53.2 million (€44m) transaction will give it a market share of close to 50 per cent in the east coast province, with its 48 million inhabitants. The transaction is expected to close during the summer of 2004.

Interbrew currently has six breweries and one bottling centre in Zhejiang Province, representing operations in Ningbo, Zhoushan, Wenzhou, Yandangshan, Pingyang, Jinhua and Yuyao. Interbrew says that With a strong local brand, Red Shiliang, an excellent distribution network, a very experienced local management and a good geographic fit, Zhejiang Shiliang Brewery Company is expected to be integrated with its existing operations in Zhejiang province.

"With this acquisition Interbrew has reinforced its leading position in Zhejiang by adding over 2 million hecolitre sales volume to its current operations in the province."​ said Patrice Thys, President Interbrew Asia Pacific Zone. "Zhejiang, one of the wealthiest provinces in East China, is a key platform for advancing our strategy of being a leading player in China's beer industry."

Zhejiang Shiliang Brewery Company's General Manager, Mr. Qiu Jiangsheng said, "Zhejiang Shiliang Brewery Company Ltd. is very pleased to have reached agreement with Interbrew, the world's major brewery group, with respect to this transaction. By combining our own strength in the brewery operation and Interbrew's technical, management and financial capacitates, Zhejiang Shiliang Brewery Company Ltd. can further enhance its competitiveness and achieve better development in the future."

Currently Interbrew is the second largest brewer in China. With this acquisition, the company says it will have a production capacity of 30 m hectolitres, a market share of over 10 per cent and 17 breweries. It currently has operations in the Zhejiang, Guangdong, Hubei, Hunan, Jiangsu and Shandong provinces. The company has been active in China since 1984, providing the transfer of technical and brewing know-how to various Chinese brewing companies, including the Zhujiang Brewery in Guangzhou and the Five Star Brewery in Beijing.

The China beer market has been awash with multinational beer companies trying to increase their presence in what is now the world's largest beer market by volume. At the top of the pile a recent battle between the two leading players in the market - Anheuser-Busch​ and SABMiller​ - to secure a valuable stake in one of the country's largest domestic brewers, Harbin, recently ended with Anheuser-Busch carving out a controlling stake in the brewer.

Either way, it seems that there will be a great deal more investment in domestic brewers in the coming months, and with competition fierce, hard fought battles may be the order of the day.

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