Budweiser logo at the company's Shanghai headquarters. (Photo/CFP)
Anheuser-Busch InBev, the world's biggest brewer, is likely to spend 3.8 billion yuan (US$630 million) to buy Siping Ginsber Draft Beer, one of China's single largest beer factories, reports Shanghai's China Business News.
An industry insider close to the case, which has been on the table since last September, said that the deal has been set, though details need to be worked out. Anheuser-Busch China's executives declined to comment.
In 2011, Anheuser-Busch's beer production reached 5.66 million tons in China, ranking third, while Ginsber ranked eighth, according to statistics from China's wine association.
Anheuser-Busch's acquisition of Ginsber should focus on the latter's market share, because Ginsber used to account for about 50% of the Jilin market. The capacity of Ginsber's single factory production exceeds 600,000 tons.
According to the acquisition process, Anheuser-Busch's plan to acquire Ginsber must win approval from the Ministry of Commerce. As of Jan. 11, the acquisition had not appeared on the ministry's approval list.
According to the third-quarter report by Anheuser-Busch, the company had in the first three quarters of 2013 agreed to acquire five beer factories in China for US$1.05 billion to strengthen its position in the nation. If it can complete all the acquisitions, it can obtain an additional production capacity of 1.9 million tons in China. Anheuser-Busch had not unveiled the details of its targets.
The acquisition, once completed, will set the northeast region as a major battle field between China Resources Snow Breweries and Anheuser-Busch. The former had originally proposed to set up a production base with a one million ton capacity in Liaoning's Yingkou, said beer marketing expert Fang Gang.
For Ginsber, to be sold with such a price would be good, while the nation's beer concentration will be further upgraded, Fang said.
In the future, Fang said, there will be three first-tier brewers in China: Snow Breweries, Tsingtao Brewery, and Yanjing Beer, plus three foreign brands: Anheuser-Busch, South African Breweries (SAB) which owns 49% of Snow Breweries, and Carlsberg. Second-tier brands such as Zhujiang Brewery are swaying around losses or small profits, with some even waiting merge, Fang said.
"China, as the world's biggest beer consumer market, no doubt is a tremendous temptation for foreign brewer giants," Fang said.