Distillery to increase stake in competitor
By Pan Xiaoyi |
January 6, 2011, Thursday
|
Print Edition
Print Edition
JIANGSU Yanghe Brewery Joint-Stock Co will spend 533 million yuan (US$80 million) to increase its stake in a smaller rival to 67 percent as demand rises for liquor in China, the world's biggest alcohol market.
Jiangsu Yanghe will acquire an additional 26.9 percent of Jiangsu Shuanggou Distillery Stock Co, the company said in a statement to the Shenzhen Stock Exchange. Jiangsu Yanghe last year bought a 40.1 percent stake in Shuanggou for 535.9 million.
"The acquisition will help consolidation between the two companies," the statement said. Jiangsu Yanghe said previously it plans to merge with Shuanggou eventually.
The deal requires both board and shareholder approval.
Jiangsu Province-based Yanghe, one of the country's leading liquor producers, also said it will invest another 1.2 billion yuan in its production facility in the province after announcing in the first half of last year it would spend 1.7 billion yuan to expand production capacity.
China's distilled liquor makers have been revving up production as consumption of white spirits is expected to grow 20 percent annually in the next three to five years, a market watcher said.
In 2009, 1,521 major liquor makers reported combined sales of 209 billion yuan, up 27.1 percent from a year earlier, according to Shenyin & Wanguo Securities Co.
"Stable economic growth and the government's focus on spurring domestic consumption will continue to push up liquor sales," said Hong Ting, an analyst at Huatai United Securities Co.
Hong also said liquor prices will rise this year, especially high-end white spirits such as Moutai and Yanghe.
Jiangsu Yanghe will acquire an additional 26.9 percent of Jiangsu Shuanggou Distillery Stock Co, the company said in a statement to the Shenzhen Stock Exchange. Jiangsu Yanghe last year bought a 40.1 percent stake in Shuanggou for 535.9 million.
"The acquisition will help consolidation between the two companies," the statement said. Jiangsu Yanghe said previously it plans to merge with Shuanggou eventually.
The deal requires both board and shareholder approval.
Jiangsu Province-based Yanghe, one of the country's leading liquor producers, also said it will invest another 1.2 billion yuan in its production facility in the province after announcing in the first half of last year it would spend 1.7 billion yuan to expand production capacity.
China's distilled liquor makers have been revving up production as consumption of white spirits is expected to grow 20 percent annually in the next three to five years, a market watcher said.
In 2009, 1,521 major liquor makers reported combined sales of 209 billion yuan, up 27.1 percent from a year earlier, according to Shenyin & Wanguo Securities Co.
"Stable economic growth and the government's focus on spurring domestic consumption will continue to push up liquor sales," said Hong Ting, an analyst at Huatai United Securities Co.
Hong also said liquor prices will rise this year, especially high-end white spirits such as Moutai and Yanghe.
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