Chinese brewer eyes SABMiller’s European assets
CHINA Resources Beer Holdings, maker of the world’s most consumed beer, is considering a bid for SABMiller’s central and Eastern European assets, valued at about $6bn, according to people familiar with the matter.
The producer of China’s Snow beer brand is speaking with potential advisers about a bid, the people said, asking not to be identified as the details are not public. A sale process for the assets, which include the brewer of Czech lager Pilsner Urquell, is expected to start in October after SABMiller’s deal with Anheuser-Busch InBev (AB InBev) closes, they said.
China Resources could go up against Japanese brewer Asahi Group Holdings and financial bidders, including Swiss investment group Jacobs Holding, Poland’s Kulczyk Investments and CVC Capital Partners, three of the people said. KKR & Co, Advent International Corporation and Mid Europa Partners may also bid, they said.
“The competition will be huge,” Bloomberg Intelligence analyst Duncan Fox said. “At some point, CR Beer will want to move outside of China. However, many names seem to be interested in these assets.”
AB InBev agreed to divest operations in Hungary, Romania, the Czech Republic, Slovakia and Poland to help secure regulatory approval for its about $100bn takeover of rival SABMiller. The company may prefer to sell to another brewer to help ensure a level playing field among competitors in these markets, the people said.
China Resources Beer chief financial officer Tomakin Lai said in August the company was open to acquisition opportunities and was not interested in smaller companies. Representatives for AB InBev, Asahi, China Resources, CVC, Advent and Kulczyk declined to comment. Representatives for Mid Europa Partners, KKR and Jacobs Holding did not immediately respond to requests for comment.
AB InBev already agreed to sell the Peroni, Grolsch and Meantime brands to Asahi for €2.55bn. Divesting additional assets in central and eastern Europe will help AB InBev cut back in a difficult market. SABMiller’s Polish business, the largest brewer in the country, has been weighed down by discounting and competition that contributed to declining lager sales in Europe overall.
In March, China Resources agreed to buy out SABMiller’s remaining stake in the Snow beer venture for $1.6bn in a deal that helped AB InBev secure Chinese antitrust approval.
SABMiller’s board recommended AB InBev’s takeover offer, which will combine the world’s two largest brewers, in July. Shareholders will vote on the deal on September 28, and the transaction is expected to close on October 10.
China Resources Beer reported first-half profit from continuing operations rose 45% to 605-million yuan ($91m) due to higher average selling prices, enhanced production capacity and reduced materials costs. The brewer’s sales for the six months ended June 30 declined 1.8% to 15.2-billion yuan.
The competition will be huge. Many names seem to be interested in these assets