China Resources Said Near SAB JV Buyout for About $2 Billion

  • Deal would give co. full ownership of best-selling beer Snow
  • Agreement for 49% stake may be announced as soon as this week

China Resources Beer (Holdings) Co. is near an agreement to buy out the remaining stake in Snow beer, its Chinese brewery joint venture with SABMiller Plc, for about $2 billion, people with knowledge of the matter said. 

The state-backed company plans to purchase all of SABMiller’s 49 percent stake in China Resources Snow Breweries Co., maker of the world’s best-selling beer, said the people, who asked not to be identified as the information is private. The deal could be announced as soon as this week, the people said. Talks are ongoing and could be delayed or fall apart, they said.

Anheuser-Busch InBev NV may need to sell the stake to secure Chinese antitrust approval for its acquisition of SABMiller, analysts have said. AB InBev said Feb. 25 that it was making progress with Chinese regulators on gaining approval for the industry’s biggest-ever deal.

Spokesmen for China Resources, AB InBev and SABMiller declined to comment.

At $2 billion, the 49 percent stake will miss some analysts’ estimates for the venture’s value. Analysts at Nomura Holdings Inc. and Sanford C. Bernstein had previously estimated that the stake was worth about $5 billion.

Brand Sales

Still, AB InBev’s other disposals to win regulatory approval for the more than $100 billion purchase of SABMiller may fare better.

Asahi Group Holdings Ltd. said last month it was in exclusive talks with AB InBev to acquire the Peroni and Grolsch beer brands for 2.55 billion euros ($2.77 billion). At that level, the Japanese brewer would be “paying a very full price” for the assets, Trevor Stirling, an analyst at Sanford C. Bernstein, said at the time.

The company got $12 billion from Molson Coors Brewing Co. for SABMiller’s 58 percent stake in MillerCoors, which includes the Coors Light and Blue Moon brands.

Snow Beer

China’s commerce ministry in 2008 approved InBev’s $52 billion takeover of Anheuser-Busch Cos Inc. on the condition that the merged entity wouldn’t be allowed to acquire shares in Snow or Beijing Yanjing Brewery Co., two of China’s largest domestic brewers.

Beer sales in China, the world’s largest beer market by volume, are expected to rise 41 percent in the five years through 2019 to reach 683 billion yuan ($104 billion), according to a June report from research firm Euromonitor.

Snow beer outsells all other beers globally, Euromonitor’s data shows. The partnership between SABMiller and China Resources, which began with two breweries in 1994, operates more than 90 operations across China, according to SABMiller’s website.

China Resources Beer in December picked advisers including HSBC Holdings Plc, Nomura, Rothschild and UBS Group AG to advise on its options for Snow, people with knowledge of the matter said at the time.

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