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China Resources Beer explores possibility of minority stake in the Asian unit of world’s largest brewer

  • AB InBev scrapped plans for a US$9.8 billion listing in Hong Kong of its Asian unit in July
  • China Resources Beer share price surges 7.84 per cent to all-time high on net profit report

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Budweiser beers. Photo: Bloomberg
Daryl Choo

China Resources Beer, maker of the world’s bestselling beer Snow, said on Friday it is exploring the possibility of acquiring a minority stake in Budweiser APAC, the Asian unit of Belgian-based Anheuser-Busch InBev.

“We’re paying close attention to this issue and evaluating its business, but we have yet to decide whether we are interested and if [the acquisition] will fit into the expansion plans for China Resources Beer,” executive director and chief executive Hou Xiaohai said in response to a reporter’s question at the company’s interim results conference.

AB InBev, weighed down with debt after its acquisition of SABMiller, had filed for a listing of its Asian business in Hong Kong. In a shock announcement, it shelved plans for the US$9.8 billion initial public offering in July, which would have been the world’s largest IPO this year. It cited “prevailing market conditions” after it was unable to command a high enough price.
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A week later, AB InBev in another dramatic turn agreed to sell its Australian unit to Japan-based Asahi Group Holdings. The US$11.3 billion sale was a backup plan months in the making, and while it raised more than the IPO would, the world’s largest brewer said it still believed in the rationale of offering a minority stake of Asian business Budweiser APAC, now excluding Australia, provided it could be completed at “the right valuation”, Reuters reported.

“Budweiser’s failed listing has not affected us. Neither do I think it would affect its operations in China. Making sure you get your own affairs in order, I think that’s the way forward,” said Hou.

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China Resources Beer share prices surged 7.84 per cent, closing at an all-time high of HK$39.20, after the company posted a 24.1 per cent on year growth in net profit to 1.87 billion yuan (US$265.9 million) in the first six months to June.

Revenue grew 7.2 per cent year on year to 18.83 billion yuan, boosted by increased sales volume and higher average selling prices. It expects competition in the industry to remain intense and said it will continue bolstering its position in the premium market by leveraging its partnership with Heineken.

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