CR Beer to purchase SABMiller’s Snow stake
Print Edition
CHINA Resources Beer has agreed to buy SABMiller’s stake in its CR Snow venture for a less-than-expected US$1.6 billion, removing another regulatory obstacle to the London-based brewer’s takeover by Anheuser-Busch InBev.
Investors in China Resources Beer (Holdings) Co toasted its bargain price for control of the world’s best-selling beer by volume, with shares in the Chinese state-backed company rising 25 percent to a five-year high.
The deal yesterday to sell SABMiller’s 49 percent CR Snow stake was widely anticipated but came sooner than expected for some.
It is the latest in a series of divestments aimed at getting approval for SABMiller’s US$100 billion-plus takeover by AB InBev, the largest deal in consumer goods history.
AB InBev has already struck deals to sell SABMiller’s stake in US joint venture MillerCoors to Molson Coors Brewing and its Peroni and Grolsch brands to Japan’s Asahi Group Holdings.
While the Snow divestiture shows AB InBev’s determination to push ahead with its mega-deal, it came at a cost, analysts said.
“We think that the 49 percent stake could have attracted a higher price if offered to other brewers on the open market, but assume that ABI’s negotiations with the Chinese regulators ... ended up precluding this course of action,” said Canaccord Genuity analysts, who had valued the stake at around US$5 billion.
Jeremy Yeo, an analyst at Mizuho Securities Asia, said the deal was positive for CR Beer’s shareholders as he had been expecting a price tag of US$3 billion to US$3.5 billion.
The deal, which would give China Resources full control of the largest brewer in China with a 30 percent market share, is contingent on the closing of the AB InBev-SABMiller deal, which is expected later this year.
China Resources plans to use a combination of funding options including debt and/or equity financing to pay cash.
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