Carlsberg to buy eight breweries from China’s Chongqing Beer
30 Dec 2013
Carlsberg A/S, the world's fourth-biggest brewing company, today said that it will buy eight Chinese breweries from Chongqing Beer (Group) Co. for 1.56 billion-yuan ($257 million).
The move comes less than a month after Carlsberg increased its stake in Chongqing to 60 per cent from 29.7 per cent, strengthening its foothold in the world's largest beer market by volume. (See: Beer maker Carlsberg hikes stake in China's Chongqing)
The Copenhagen-based brewer will buy 100 per cent of Chongqing Beer Group Assets Management Co, a holding company based in Chongqing, China.
The eight breweries in the deal are located in three provinces - three in Jiangsu, three in Anhui and two in Zhejiang - and primarily sell brands in-licensed from Chongqing Brewery as well as the brand Tianmuhu.
Chongqing Beer, owned by the local government, operates 15 breweries in the country. It is a market leader in its home province and operates in the surrounding provinces of Sichuan, Guizhou, Guangxi and Hunan and in the eastern Chinese provinces of Anhui, Zhejiang and Jiangsu.
Chongqing Beer holds a market share of about 80 in the provinces that it operates in and sells around 10 million hectolitres.
Carlsberg, which inherited a 17.46-per cent stake in Chongqing Brewery through its takeover of British brewer Scottish & Newcastle (S&N) in 2007, raised it in 2010 to 29.7-per cent stake and became the biggest shareholder in the Chinese company.
The deal enabled Carlsberg gain control of S&N's operations in France, Greece, Vietnam and China, as well as Baltic Beverages Holdings AB.
The Chinese beer market was estimated to be worth around 451 billion yuan ($74 billion) in 2013 with a volume of 53 billion litres.
Carlsberg was the sixth-largest brewer in China in 2012 with a market share of 2.6 per cent.
Asia has become the main battleground for the top four global brewers - Carlsberg, AB InBev, SABMiller and Heineken - which need the growing middle classes in emerging markets to compensate for sluggish sales in Europe and the US.