Carlsberg A/S (CARLB)’s purchase of a further stake in Chongqing Brewery Co. (600132) is not a “problem,” the Danish company said, responding to reports that the acquisition may be halted by Chinese authorities.
The reports said Carlsberg’s use of its Hong Kong unit as the buyer “could cause trouble due to a rule that the buyer should have had a profit” in the most recent years, Jens Bekke, a spokesman for Copenhagen-based Carlsberg said today in an e- mailed statement. “There is nothing in this,” he said, adding the brewer has assumed “joint and several liability” with its unit for its obligations in the acquisition. “There is no problem.”
Carlsberg said on June 10 it would buy an additional 12.25 percent in local-government-owned Chongqing for 2.39 billion yuan ($353 million), bringing its stake to 29.71 percent. Chongqing is China’s largest municipality, with 28.6 million residents, and Chongqing Brewery is its dominant beermaker, providing Carlsberg with a platform for expansion in China as it targets Asian growth. Asia provided 7.1 percent of its revenue last year.
Deng Hui, Chongqing Brewery’s board secretary, declined to comment on the media reports, and said that the company hasn’t yet reached the stage where it would seek approval from Chinese regulators. Chongqing’s shares fell 6.2 percent, the most in almost eight weeks. Carlsberg’s shares rose as much as 4 percent.
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