China Resources to Buy Out Snow Beer Unit for $1.6 Billionby , , and
Deal gives company full ownership of world's best-selling beer
Transaction may help approval of AB InBev's SABMiller purchase
China Resources Beer (Holdings) Co. agreed to buy out the remaining stake in Snow Breweries, its Chinese joint venture with SABMiller Plc, for $1.6 billion, smoothing the way for a takeover of its partner by Anheuser-Busch InBev NV.
The transaction was approved by the board and is subject to regulatory approval, China Resources said in a statement Tuesday.
Sale of the stake may help AB InBev secure Chinese antitrust approval for its acquisition of SABMiller. AB InBev said Feb. 25 that it was making progress with Chinese regulators on gaining approval for the beer industry’s biggest-ever deal.
Analysts at Nomura Holdings Inc. and Sanford C. Bernstein have previously estimated the stake’s value at about $5 billion.
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 is the world’s best-selling brand, 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.
Nomura and UBS Group AG advised China Resources on the deal, along with Rothschild & Co., Citigroup Inc. and HSBC Holdings Plc.