InBev acquires control of China brewer
Debier Brewery, located in Hunan province, China, for $18.2
million. The move is part of InBev's ongoing integration process of
the Lion Group Breweries, which it acquired earlier this year.
Like all the leading multinational brewers, InBev has been pushing hard to increase its position in what is now the largest market for beer by volume in the world. The move aims to counteract stagnant sales in developed markets such as western Europe and the US, where further growth potential is limited.
The company said that the transaction is expected to close by the end of the year.
InBev currently has two breweries in the Eastern Chinese province of Hunan (66.6 million inhabitants), the Hunan Debier Brewery in the city of Changsha and Zhuzhou Debier Brewery in the city of Zhuzhou. Both breweries were acquired as part of the transaction with the Malaysian Lion Group, which sold its China brewery operations to InBev at the beginning of this year. As part of that transaction, InBev acquired 55 per cent of the Hunan Debier Brewery.
InBev said that the acquisition of the remaining 45 per cent stake from Changsha Baisha Brewery, would help to consolidate it 80 per cent market domination in the Hunan beer market.
Hunan Debier brewery has a capacity of 1.3 million hecolitres and 1.1 million hecolitres of production volume, producing mainly the local Baisha brand. The brewery has an expected sales volume growth in 2004 of 32 per cent compared to 2003.
"With this acquisition, Interbrew China has reinforced its position in Hunan, further illustrating its commitment to the province," said Patrice Thys, president InBev Asia Pacific Zone.
InBev is the third largest brewer in China, with a production capacity of 30 million hectolitres, a market share of over 10 per cent and 18 breweries and has operations in the Zhejiang, Guangdong, Hubei, Hunan, Jiangsu and Shandong provinces.
Its achievement is all the more striking considering it only entered the China market in 1997 with the acquisition of the Nanjing and Jingling Breweries.
