China: Anheuser-Busch Inc may pay up to US$ 1 billion for a stake in central China's Henan Jinxing Beer Group Corp, an official at the Chinese brewery told AFX - Asia on October 19. While the big US beer producer denied that any discussions are under way, an official at the Chinese firm said that talks have been held, though no final accord is on the table. 'Anheuser-Busch has initially agreed to pay up to one bln usd for some of our assets,' the Jinxing official told XFN-Asia. 'Bringing Anheuser-Busch in as a foreign strategic investor comes in line with our overall plan to diversify our state-owned shareholding structure,' he said. The official, who asked not to be named, also declined to say how big a stake Anheuser-Busch might take in the Chinese firm for that price.

The US brewer, which has a 99.4 % stake in Harbin Brewery, and 9.91 pct of China's top beermaker, Tsingtao Brewery Co Ltd, issued a statement on October 19 denying contacts with Jinxing Beer. 'Anheuser-Busch is not in discussions with representatives from Jinxing,' Steve Burrows, company CEO and president, said in a statement.

Anheuser-Busch earlier this year aggressively outbid SABMiller in a takeover battle for China's fourth largest beermaker, Harbin Brewery Group.

Jinxing Beer is the top brewer in Henan province with around 10 affiliates in other parts of the country. According to its website the company owns 25 beer production lines, with an annual capacity of 1 million tonnes.

Should it go ahead, a deal between Anheuser-Busch and Henan Jinxing would mark another successful bid by a foreign brewer to buy into one of the world's fastest growing beer markets, where annual per capita consumption currently stands at only 19 litres, compared with 75 litres in Europe and 84 in the US.
At the same time, income levels in China are rising rapidly and consumers are acquiring a growing taste for beer.

Driven by huge growth potential and sluggish beer demand in their home countries, many foreign brewers have entered China by acquiring local brands. Global beer maker Interbrew has spent more than US$ 600 million so far in China, and now owns 9 % of the mainland beer market. Other foreign brewers holding stakes in Chinese breweries include SABMiller Plc, Carlsberg International AS and Scottish & Newcastle Plc.

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