China: Chinese brewers not active in searching for overseas stake buyers
Chinese breweries are not actively searching for overseas partners or stake buyers, according to an analyst and industry executives. According to the MergeMarket report, the market for beer in the country is becoming more attractive to overseas investors increasing 5-8% yearly.
United Securities analyst Liu Shukun said the market with high growth and return rate is attractive, but China is relatively mature in terms of brewing technology and promotions. So the incentive for local companies to introduce overseas investors is diminishing.
There are several hundred brewing companies in China. Some 20 of them have established a relationship with large overseas players, like Heineken and Budweiser, or introduced strategic investors from Japan, Taiwan, and Hong Kong.
Most Chinese beer brewing companies are state-owned and profitable. The analyst forecasts this situation will remain so for many years: another reason why local companies might retain controlling stake positions, he said.
Yanjing Beer has been approached by overseas players seeking cooperation or even a buyout in the past year, but was not interested, an executive at the company said. Yanjing Beer, a listed state-owned company, is also one of the biggest breweries companies in China. In 2005, its turnover reached USD 1bn.
Daxue Beer sold a 25% stake to Kirin Brewery Company, a Japanese player, last year. An executive at the company said there were no plans to sell a controlling stake in the future. If an overseas investor is seeking potential collaboration with local beer companies, or seeking a buyout, it should focus on second-tier companies, he continued.
In 2004, Daxue Beer's turnover reached CNY 263m (USD 32m). The Kirin deal was worth CNY 300m (USD 37m).
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