SAB makes bid for the Harbin Brewery

Modern Brewery Age, May 31, 2004

SABMiller has formally launched an unsolicited takeover bid to buy China's fourth-largest brewery for $390 million. SABMiller already owns 29.6 percent of Harbin.

The offer for Harbin was posted last week on the Web site of the Hong Kong Stock Exchange, where Harbin Brewery's shares are traded.

The offer for the rest of Harbin is likely to trigger a bidding war with Anheuser-Busch Cos., which recently acquired a 29 percent stake in the, Chinese brewery for $139 million.

Harbin Brewery managers and local political figures have announced that they prefer a partnership with Anheuser-Busch.

SABMiller is offering 4.30 Hong Kong dollars (55 U.S. cents) a share in cash for the shares of Harbin Brewery that it doesn't own, on the condition that it acquires a majority stake.

Graham Mackay, SABMiller's chief executive, said its bid was intended to "ensure a positive future for Harbin Brewery's brands, breweries and employees."

SABMiller has interests in 30 Chinese breweries and a 49 percent stake in China Resources Breweries Ltd.--China's second-largest beer-maker after Tsingtao Brewery Co., which is part owned by A-B.

SABMiller says it plans to combine the facilities of Harbin and China Resources in China's northeast to raise profits without cutting jobs at either brewery. Last week, SABMiller announced the purchase of a 90 percent stake in two small breweries in eastern China's Anhui province..