China Resources Snow Breweries Ltd. (CR Snow) in a joint venture with SABMiller, one of the worldâ€™s leading brewers, will acquire a 100 percent equity interest in Chinaâ€™s Yinyan Brewery for U.S $42.3 million.
China Resources Enterprise Ltd., which owns 51 percent of CR Snow, will also purchase the brewing assets of Xiangwang Brewery for U.S $10.1 million, confirmed SABMiller in an official statement. SABMiller owns the other 49 percent of CR Snow.
â€œThese acquisitions will not only effectively reinforce CR Snowâ€™s market position in these provinces, but also provide a larger platform to expand our national brand SNOW in these strong growth areasâ€, said Mr. AndrÃ© Parker, Managing Director of SABMiller Africa & Asia.
Yinyanâ€™s current annual production capacity is 186,000 kiloliters of beer which will increase to 240,000 following the investment, the statement said, however a set timeframe for the proposed growth was not given.
The statement said $7.38 million will be invested in Xiangwang Brewery operations in Chinaâ€™s eastern Anhui province in order to increase its annual production capacity from the present 93,000 kiloliters to 160,000 kiloliters.
Xiangwang last year sold a reported amount of 65,000 kiloliters of beer. Its main brand â€œXiangwangâ€ currently has a dominant market share in Huaibei, a city in Anhui Province.
Last year, Yinyan sold an estimated 104,000 kiloliters and focused on its â€œYinyanâ€ series of beers distributed mostly in Shanghai and the Jiaxing area of Zhejiang Province.
The acquisition of Xiangwang will establish a production base in Anhui for CR Snow, while ownership of Yinyan Brewery will allow the firm to consolidate its Zhejiang network by forming ties with its existing breweries at Qianjiang and Xiling.
China Resources Enterprise Ltd. is listed in Hong Kong on the Hang Seng Index, and is a holding of China Resources National Corporation with more than 90,000 employees in mainland China.
SABMiller originally started in South Africa and currently distributes to over 60 countries across five continents.