Anheuser-Busch Cos., Inc., the world's largest brewer, and Tsingtao Brewery Co., Ltd., the largest brewer in China, announced on April 3, 2003 that they have closed their agreement under which Anheuser-Busch's ownership in Tsingtao will increase to 27% over a period of up to seven years. The agreement calls for Tsingtao to issue three convertible bonds valued at approximately US$ 182 million (HK$ 1.416 billion) to Anheuser-Busch. As the debt converts to equity over seven years, Anheuser-Busch's economic interest in Tsingtao will increase from its existing 4.5% to 27%, all held in the form of "H" common shares listed on the Hong Kong Stock Exchange. The agreement was signed in October 2002.

�At the closing, Anheuser-Busch paid US$ 116.4 million (HK$ 907.9 million) for the first two bonds. It will pay an additional US$ 65.2 million (HK$ 508.3 million) within 12 months. The first bond will be converted to H shares in 90 days, which will increase Anheuser-Busch�s equity interest to 9.9 %. With this transaction, Anheuser-Busch will have representation on the Tsingtao board, supervisory board and key board committees, including Strategy and Investment; Audit and Finance; and Human Resources and Corporate Governance. Anheuser-Busch will receive additional representation as the equity interest increases. The Qingdao State-Owned Assets Bureau will remain the largest shareholder in Tsingtao, holding a 30.6 percent share after all bonds are converted. Anheuser?Busch will be the largest non?government shareholder. The capital contributed by Anheuser-Busch will be used to improve Tsingtao�s brewing assets, construct new brewing facilities and make future acquisitions,� Anheuser-Busch reported.

The China beer market is estimated to be 239 million hectoliters in 2002, which is believed by some sources to make it now the largest beer market in the world. Its flagship brand is Tsingtao, the number-one beer brand in China and the most famous Chinese brand in the international market.

Anheuser-Busch gross sales in 2002 were US$ 15.7 billion, selling 127.9 million U.S. barrels (150.1 million hl), including its proportionate share of equity partners' volume, giving it an 11% share of the global beer market.

Anheuser-Busch also owns 98% of the Budweiser Wuhan International Brewing Co. in Wuhan, China, where its Budweiser and Bud Ice brands are brewed.