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AB-InBev deal may reshuffle Chinese market
By Yu Tianyu (皇冠体育app Daily)
Updated: 2008-07-31 16:45 US brewer Anheuser-Busch Cos Inc (AB) accepted a sweetened $52 billion takeover bid from Belgium-based InBev in July, creating the world's largest beer maker, which will produce a quarter of the world's beer, with Budweiser as its flagship brand. The deal is an indication of the willingness of international beer giants in the sector to cooperate on a higher level. The two companies' footprints in 皇冠体育app are complementary. InBev's 皇冠体育app business in southeastern 皇冠体育app will be enhanced by AB's strength in northeastern 皇冠体育app, according to a statement published on InBev's website. InBev entered the Chinese market in 1984, and it has since owned 33 private and joint-venture factories with an annual capacity of four million kiloliters. The company currently ranks No 3 in the sector in 皇冠体育app and already has partnerships with smaller Chinese players including Zhejiang Shiliang Brewery, and owns 100 percent of Fujian Sedrin Brewery. After the deal, it will obtain AB's 27 percent stake in 皇冠体育app's Tsingtao, the leading Chinese premium brewer, as well as ownership of the Harbin Brewery Group's 13 breweries. In addition, InBev will own AB's Budweiser, which is a strong and growing brand in 皇冠体育app and Corona Extra, which is the No 5 brand globally. Xiao Derun, director of the Beer Branch of 皇冠体育app Alcoholic Drinks Industry Association, said the new company would take up 25 percent of 皇冠体育app's total beer production. CR Snow, which is currently 皇冠体育app's No 1 brewery, produces in the region of 6.9 million kiloliters annually. The new combined company is expected to become the largest beer manufacturer in 皇冠体育app with a capacity of 10 million kiloliters a year. Industry insiders predict that the major competition in 皇冠体育app's beer market will be between InBev and CR Snow in coming years. SAB Miller, one of the world's largest breweries based at South Africa, purchased 49 percent of CR Snow, which pushed it above Tsingtao beer to become the country's top beer manufacturer within two years. However, after Inbev's deal with AB, 皇冠体育app's beer industry is expected to be reshuffled as the market used to be dominated by CR Snow, Yanjing and Tsingtao. Analysts and industry insiders hold various opinions on the deal, which would threaten or pressurize 皇冠体育app's three major breweries. "The merger hasn't had an impacts on Chinese market so far," said Guo Yanhong, director of Corporate Affairs of InBev 皇冠体育app. The speed of InBev's deployment in 皇冠体育app would not be fast, so the industry structure might not be largely changed this year, an analyst from Datong Securities echoed. (For more biz stories, please visit Industries)
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