Anheuser-Busch Cos, the world's biggest beermaker, entered a bidding contest with SABMiller Plc for Harbin Brewery Group in the first takeover battle by overseas investors for a company in China.
Anheuser-Busch bought a 7 percent stake in Harbin Brewery from Capital Group Cos for HK$388.2 million (US$50 million) at a price 30 percent more than last week's takeover bid by SABMiller.
Anheuser-Busch must make a general offer now because its holding exceeds 30 percent, said Ernest Lau, spokesman for the Hong Kong Securities and Futures Commission.
The two companies are competing for a share of a US$6 billion market that Harbin Brewery forecasts will grow 6 percent a year this decade, as Chinese incomes rise. Interbrew SA, Heineken NV and other overseas brewers have formed partnerships with Chinese beermakers as consumption slows in the US and Europe.
"Generally, they are looking to establish their market presence in China," said Richard Wong, a fund manager at HSBC Asset Management. "This reflects the growing importance of China as a consumer market. With per capita wealth increasing 10 percent a year, China will be an attractive market, and it is important to enter as early as possible."
The takeover offer by Anheuser-Busch for all the Harbin Brewery shares it doesn't already own must be "made as soon as possible," Lau said.
St. Louis-based Anheuser-Busch raised its stake in China's largest brewer to 36 percent by buying 69.6 million shares at HK$5.58 each from Capital Group, the third-largest US mutual fund. That exceeds the 29.4 percent stake held by London-based SABMiller, the world's second-largest brewer.
"We've obviously noted it, and we expect to issue a statement shortly," SABMiller spokeswoman Sue Clark said.
SABMiller last week offered HK$3.04 billion, or US$4.30 a share, for the shares it doesn't already own.
The beer battle began on May 2, when Anheuser-Busch announced that it bought a 29 percent stake in Harbin Brewery for HK$1.08 billion. It beat out SABMiller, which had been hoping to double its holding in the brewer by buying the same stake from the Harbin city government.
SABMiller responded by announcing a general offer for the Chinese beermaker three days later. Harbin Brewery shares have since traded above SABMiller's offer price, as investors bet on a counterbid from Anheuser Busch. The stock, which halted trading today, rose 58 percent in May.
The Chinese brewer, which makes Harbin and Hapi beers, asked shareholders to reject SABMiller's offer and hired CLSA Ltd, the Asian investment-banking unit of France's biggest bank, as its financial adviser. SABMiller is being advised by ABN Amro Holding NV and Anglo-Chinese Corporate Finance Ltd.
China's 1.3 billion people consume an average 19 liters of beer a year, compared with 39 liters in South Korea, 53 in Japan and 80 in Australia, according Australian brewer Lion Nathan Ltd.
China was the biggest producer of beer in the world the past two years, surpassing the US, the China Securities Journal reported on March 10.
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