Miller clashes with A-B over Chinese brewery

Modern Brewery Age, May 10, 2004

SABMiller PLC launched a takeover bid last week for China's Harbin Brewery Group Ltd., just days after rival Anheuser-Busch Cos. Inc. secured a 29 percent stake in the regional brewer. The offer could trigger a bidding war for control of China's fourth largest brewer.

SAB Miller is offering to pay 4.3 Hong Kong dollars (55 U.S. cents) per share for Harbin shares, 33 percent more than its closing price last week of 3.22 Hong Kong dollars and valuing all of Harbin at 4.3 billion Hong Kong dollars ($551 million). Harbin stock surged, suggesting traders expect a higher offer.

Anheuser-Busch International president Stephen Burrows said in a statement the SABMiller bid was not unexpected but did not comment on the possibility of a higher counterbid.

Analysts said A-B could sell the just-purchased stake, or enter a bidding war with SABMiller.

London-based SABMiller bought its original 29.4 percent in Harbin Brewery last year. Jonathan Kirby, financial director of SABMiller's Africa/Asia division, told the Associated Press that the beermaker had long planned its bid but A-B's move prompted it to move faster.

SABMiller already has interests in 30 breweries in northeastern and central China and a 49% stake in China Resources Breweries--China's second-largest brewing company.

China's beer market is now the world's largest, surpassing the size of the U.S. market in 2002.