FDBusiness.com

SABMiller, through its China Resources Snow Breweries joint venture with China Resources Enterprise, is acquiring Kingway Brewery for a total cash consideration of RMB5.38 billion ($864 million).

The Kingway Brewery business comprises seven breweries, four of which are in one of China’s fastest growing and most affluent regions, Guangdong province, with breweries also in the growing Sichuan and Shaanxi provinces and Tianjin municipality. Total annual production capacity of Kingway is 14.5 million hectolitres. In 2011, the business sold 9.3 million hectolitres of beer.

The acquisition is highly complementary with CR Snow’s existing footprint and will reinforce its production base, sales infrastructure and market position in the fast growing Guangdong region as well as providing additional scale and market presence in Sichuan, Shaanxi and Tianjin.

Ari Mervis, Managing Director of SABMiller Asia Pacific, comments: “The acquisition of Kingway gives us greater access to high growth and attractive regional markets in China, thereby enhancing CR Snow’s competitive position.”

The transaction is subject to regulatory approvals and final approval of Kingway’s shareholders.