4th Jan 2007 07:00
SABMiller PLC04 January 2007 4 January 2007 SABMiller joint venture to acquire Blue Sword minorities China Resources Snow Breweries Limited ("CR Snow"), SABMiller's joint venture inChina with China Resources Enterprise, Limited ("CRE"), has announced that ithas agreed to acquire a 38% equity interest in 14 breweries based in the Sichuanprovince in South West China (together the "Sichuan Breweries") for a total cashconsideration of US$320 million. The remaining 62% equity interest in theSichuan Breweries is already owned by CR Snow. As part of the transaction, CRSnow will also acquire the rights to the "Blue Sword" trademarks, as well asacquiring a 100% equity interest in the Guizhou Waterfall Brewery Limited ("BlueSword Guizhou") in Guiyang City, which has installed capacity of 800,000hectolitres. The transaction will be effected via the acquisition of a 100% interest in BlueSword (Group) Company Limited or "Blue Sword Group", a holding company locatedin the Shifang City in the Sichuan province. Prior to completion of thetransaction, various non-brewery related assets held by the Blue Sword Groupwill be transferred out of the company. For the year ended 31 December 2005,unaudited net profit attributable to the assets subject to the acquisitionamounted to US$12.4 million, up c. 40% on the previous year. The Sichuan Breweries joint-venture was formed in October 2001 through astrategic agreement between CRE Beverage Ltd (now named as China Resources SnowBreweries Limited) and Blue Sword (Group) Company Limited, creating the leadingbrewer in Sichuan. The brewing operations in the region at the time consisted of12 plants with a further two breweries subsequently added. Completion of the transaction is expected to take place in early 2007, followingsatisfaction of pre-closing conditions. Mr. Andre Parker, Managing Director of SABMiller Africa & Asia, said; "Thisacquisition further demonstrates CR Snow's commitment to invest in prominentlocal brands which not only complements our national branding strategy, butstrengthens our leading positions throughout regional markets." Mr. Mark Chen, Managing Director of China Resources Enterprise, Limited said; "We are very pleased that we can consolidate our brewery interests in Sichuan.Sichuan is a major profit centre for CR Snow and its contribution has beenrapidly rising on expanding market share. The acquisition will boost ouroperational efficiency in the western and south-western regions and strengthenour brand portfolio, underscoring our confidence for stronger returns in thecoming years." Sichuan province has a population of over 87 million inhabitants and is an areawhere beer demand is already strong. The Sichuan Breweries achieved a marketshare of c. 70% in the province last year and are well positioned to capitalisefurther on increasing demand with additional capacity production facilitiesplanned. Distribution channels are also well established with an extensive salesnetwork that covers neighbouring regions such as Chongqing, Yunnan, Guizhou,Tibet, Shaanxi and Gansu. Guizhou is a mountainous province, bordered to the north by Sichuan and with arelatively small population of 39 million people. Despite low current beerconsumption, there is clear opportunity for future growth, particularly throughimproving access to the SNOW brand in the local market. At present, CR Snow doesnot have a plant in the region, though production of SNOW at the Guizhou brewerywill commence on completion. Annual production capacity at the Sichuan Breweries in 2005 was 14 millionhectolitres. Construction of additional capacity is currently underway and willbe completed in mid-2007, which will add a further 1.6 million hectolitres tototal capacity. The annual production capacity at the Guizhou brewery was800,000 hectolitres over the same period. Ends Notes to editors: About China Resources Snow Breweries Limited China Resources Snow Breweries Limited was established in 1993 and became ajoint venture with SABMiller plc in 1994. The company is engaged in theproduction, sales and marketing of beer and beverages in China. Itsshareholders are China Resources Enterprise, Limited and SABMiller Asia Limited,a subsidiary of SABMiller plc. China Resources Enterprise, Limited has a 51%interest in China Resources Snow Breweries Limited while SABMiller Asia Limitedholds the remaining 49% interest. It operates more than 40 breweries in theChinese Mainland with a total sales volume of about 39.5 million hectolitres in2005. About SABMiller plc SABMiller plc is one of the world's largest brewers with brewing interests ordistribution agreements in over 60 countries across five continents. The group'sbrands include premium international beers such as Miller Genuine Draft, PeroniNastro Azzurro and Pilsner Urquell, as well as an exceptional range of marketleading local brands. Outside the USA, SABMiller plc is also one of the largestbottlers of Coca-Cola products in the world. In the year ended 31 March 2006, the group reported US$15,307 million inrevenues and profit before tax of US$2,453 million. SABMiller plc is listed onthe London and Johannesburg stock exchanges. About China Resources Enterprise, Limited China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchangeand is also traded on SEAQ International of the London Stock Exchange. It isone of the constituent stocks of the Hang Seng Index in Hong Kong. The Groupfocuses on the consumer businesses in both the Chinese Mainland and Hong Kong,with core activities being retail, beverage, food processing and distribution,textile and property investment. This announcement is available on www.sabmiller.com Enquiries: SABMiller plc Tel: +44 20 7659 0100 Sue Clark Director of Corporate Affairs Tel: +44 20 7659 0184 Gary Leibowitz Senior Vice President, Investor Relations Tel: +44 20 7659 0119 Nigel Fairbrass Head of Media Relations Tel: +44 20 7659 0105 This announcement does not constitute an offer to sell or issue or thesolicitation of an offer to buy or acquire securities of SABMiller plc (the"Company") or any of its affiliates in any jurisdiction or an inducement toenter into investment activity. This document includes "forward-looking statements". These statements maycontain the words "anticipate", "believe", "intend", "estimate", "expect" andwords of similar meaning. All statements other than statements of historicalfacts included in this announcement, including, without limitation, thoseregarding the Company's financial position, business strategy, plans andobjectives of management for future operations (including development plans andobjectives relating to the Company's products and services) are forward-lookingstatements. These forward-looking statements involve known and unknown risks,uncertainties and other important factors that could cause the actual results,performance or achievements of the Company to be materially different fromfuture results, performance or achievements expressed or implied by suchforward-looking statements. These forward-looking statements are based onnumerous assumptions regarding the Company's present and future businessstrategies and the environment in which the Company will operate in the future.These forward-looking statements speak only as at the date of this announcement.The Company expressly disclaims any obligation or undertaking to disseminateany updates or revisions to any forward-looking statements contained in thisannouncement to reflect any change in the Company's expectations with regardthereto or any change in events, conditions or circumstances on which any suchstatement is based. Any information contained in this announcement on the price at which theCompany's securities have been bought or sold in the past, or on the yield onsuch securities, should not be relied upon as a guide to future performance. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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