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A-B wins China showdown
American giant outbids SABMiller for Harbin Brewery
June 4, 2004 - Anheuser-Busch has won its takeover battle with SABMiller for the China's fourth largest brewery. SABMiller, the world's second-largest brewer and maker of the Miller brand, is withdrawing its hostile bid for the Harbin Brewery Group. SABMiller sell its 29.4% stake in the company to Anheuser-Busch, netting it a $124 million profit in little more than a year.
Anheuser-Busch's aggressive pursuit of Harbin shows how determined the U.S. brewer is to expand its presence in China. Andre Parker, SABMiller's Asia chief, said he could not justify topping Anheuser-Busch's bid, which equates to about 50 times Harbin's 2003 net profit of $14.7 million. Foreign brewers are eager to expand in China's huge and fast-growing beer market. China has annual beer sales of $6 billion and is growing at 6% a year, compared with annual growth of 1% to 2% in developed markets such as the U.S. and Europe. Harbin gives Anheuser-Busch control of a low-cost local brand in a nation where a bottle of beer may sell for just 12 U.S. cents. Anheuser-Busch holds a 9.9% stake in Tsingtao Brewery Co. Its main presence in China has been its Budweiser brand, which it markets as a premium product across China. Now it can prevent Harbin, which mostly sells low-price beers, from moving more upscale and competing more directly with Budweiser.
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