China Resources Beer (Holdings) Co Ltd is in talks to acquire Heineken NV&rsquo;s China business in a deal that could be worth more than $1 billion, as the country`s largest brewer seeks new growth from premium brands, five people close to the discussions said.&nbsp;

The negotiations come as global beer giants such as Heineken, AB InBev and Carlsberg are facing fierce competition from local rivals and each other in emerging markets, which have been touted as the growth engine for the world`s biggest brewers.&nbsp;

China is the world`s largest beer market by volume. CR Beer`s biggest brand, Snow, is the world`s top-selling beer but is almost exclusively sold in China. 
&nbsp; 
One of the sources said the deal between CR Beer and Heineken would most likely include three breweries - in Guangdong, Hainan and Zhejiang provinces - Heineken`s distribution operation and its brands in China.

The two brewers have discussed a share-swap as part of the transaction, the source said.

Details have not been finalised and talks could yet fall apart, the sources said. They declined to be identified as the information is not public. 
&nbsp; 
CR Beer did not respond to requests for comment. Heineken declined to comment.

Shares of CR Beer jumped as much as 14.4 per cent on Friday in Hong Kong to an all-time high of HK$35.30, following the report published after Thursday`s market close.

&quot;The (CR Beer) stock move is driven by the news about the company`s interest in Heineken`s China business. China Resources already owns the top beer brand in China, but it`s a very local brand,&quot; said Steven Leung, a Hong Kong-based director at brokerage UOB Kay Hian.

&quot;With the acquisition of the Heineken business, the image of the company as a whole will improve, as China is upgrading its consumption quality,&quot; he said. &quot;The sustainability of the rally in the stock will depend on what price they pay for the Heineken business.&quot;

Shares in Amsterdam-listed Heineken rose 3 per cent on Thursday.

Heineken, which entered China in 1983, has struggled to set up a strong distribution network and to make a mark with its flagship Heineken lager, which lags far behind AB InBev`s Budweiser in the premium market, industry analysts say.&nbsp;

The Dutch brewer had a 0.5 per cent share of the China market by volume in 2016, according to research firm Euromonitor International, while CR Beer accounted for more than a quarter.

Heineken sells its premium lagers Heineken, Tiger and Sol in China, along with cheaper local brands Anchor and Hainan Beer.

The company has invested millions of dollars in promoting Heineken as the global lager of choice, predominantly through sports, including soccer and Formula One. Next month will mark its second time as prime sponsor of the Chinese Grand Prix.

Beer sales volume in China has been declining since 2013 and is forecast to continue to fall, according to Euromonitor. Sales of higher-margin premium beers, however, have been growing at a double-digit rate each year during the same period.&nbsp;

&quot;CR Beer doesn&rsquo;t have super-premium lagers, while Heineken has high-end brands but lacks scale in China,&quot; said one source. &quot;Heineken is a natural target for CR Beer.&quot; 
Heineken`s eponymous brand sells for three times the price of Snow in China. Chinese beer drinkers are overwhelmingly consumers of low-margin inexpensive beer, which makes up 80 per cent of the market by volume, compared with an average of 18 per cent in big developed markets, according to Nomura analysts.&nbsp;

Last year Japan`s Asahi Group Holdings sold its 19.9 per cent stake in Tsingtao Brewery Co - CR Beer`s biggest domestic rival - for $937 million as it decided to focus on Europe and elsewhere in Asia.

CR Beer`s interest in Heineken`s China unit follows its takeover in 2016 of SABMiller`s 49 per cent stake in its CR Snow venture for $1.6 billion.

That acquisition helped the Chinese brewer turn around its business. In 2016 it reported its first annual profit in three years after a renewed focus on the Snow brand and expanded sales in key Chinese cities.&nbsp;

Heineken trades on an enterprise value - market capitalisation plus debt - of 12 times its earnings before interest, tax, depreciation and amortisation in the last year.

That is above Carlsberg`s multiple of 10 but far short of CR Beer`s 23.

($1 = 7.8336 Hong Kong dollars)

($1 = 0.8065 euros)

The two brewers have discussed a share-swap as part of the transaction, the source said

China Resources Beer (Holdings) Co Ltd is in talks to acquire Heineken NV’s China business in a deal that could be worth more than $1 billion, as the country`s largest brewer seeks new growth from premium brands, five people close to the discussions said. The negotiations come as global beer giants such as Heineken, AB InBev and Carlsberg are facing fierce competition from local rivals and each other in emerging markets, which have been touted as the growth engine for the world`s biggest brewers. China is the world`s largest beer market by volume. CR Beer`s biggest brand, Snow, is the world`s top-selling beer but is almost exclusively sold in China. One of the sources said the deal between CR Beer and Heineken would most likely include three breweries - in Guangdong, Hainan and Zhejiang provinces - Heineken`s distribution operation and its brands in China. The two brewers have discussed a share-swap as part of the transaction, the source said. Details have not been finalised and talks could yet fall apart, the sources said. They declined to be identified as the information is not public. CR Beer did not respond to requests for comment. Heineken declined to comment. Shares of CR Beer jumped as much as 14.4 per cent on Friday in Hong Kong to an all-time high of HK$35.30, following the report published after Thursday`s market close. "The (CR Beer) stock move is driven by the news about the company`s interest in Heineken`s China business. China Resources already owns the top beer brand in China, but it`s a very local brand," said Steven Leung, a Hong Kong-based director at brokerage UOB Kay Hian. "With the acquisition of the Heineken business, the image of the company as a whole will improve, as China is upgrading its consumption quality," he said. "The sustainability of the rally in the stock will depend on what price they pay for the Heineken business." Shares in Amsterdam-listed Heineken rose 3 per cent on Thursday. Heineken, which entered China in 1983, has struggled to set up a strong distribution network and to make a mark with its flagship Heineken lager, which lags far behind AB InBev`s Budweiser in the premium market, industry analysts say. The Dutch brewer had a 0.5 per cent share of the China market by volume in 2016, according to research firm Euromonitor International, while CR Beer accounted for more than a quarter. Heineken sells its premium lagers Heineken, Tiger and Sol in China, along with cheaper local brands Anchor and Hainan Beer. The company has invested millions of dollars in promoting Heineken as the global lager of choice, predominantly through sports, including soccer and Formula One. Next month will mark its second time as prime sponsor of the Chinese Grand Prix. Beer sales volume in China has been declining since 2013 and is forecast to continue to fall, according to Euromonitor. Sales of higher-margin premium beers, however, have been growing at a double-digit rate each year during the same period. "CR Beer doesn’t have super-premium lagers, while Heineken has high-end brands but lacks scale in China," said one source. "Heineken is a natural target for CR Beer." Heineken`s eponymous brand sells for three times the price of Snow in China. Chinese beer drinkers are overwhelmingly consumers of low-margin inexpensive beer, which makes up 80 per cent of the market by volume, compared with an average of 18 per cent in big developed markets, according to Nomura analysts. Last year Japan`s Asahi Group Holdings sold its 19.9 per cent stake in Tsingtao Brewery Co - CR Beer`s biggest domestic rival - for $937 million as it decided to focus on Europe and elsewhere in Asia. CR Beer`s interest in Heineken`s China unit follows its takeover in 2016 of SABMiller`s 49 per cent stake in its CR Snow venture for $1.6 billion. That acquisition helped the Chinese brewer turn around its business. In 2016 it reported its first annual profit in three years after a renewed focus on the Snow brand and expanded sales in key Chinese cities. Heineken trades on an enterprise value - market capitalisation plus debt - of 12 times its earnings before interest, tax, depreciation and amortisation in the last year. That is above Carlsberg`s multiple of 10 but far short of CR Beer`s 23. ($1 = 7.8336 Hong Kong dollars) ($1 = 0.8065 euros)

China Resources Beer in talks to acquire Heineken's China business: Reports

Alcohol brand Budweiser might soon become the first beer on Mars, after making announcements to send barley, one of the key ingredients in beer, to be studied on the International Space Station.

According to the plans, Budweiser, along with several researchers, will initiate two barley experiments via SpaceX&rsquo;s upcoming cargo supply mission.

The mission is scheduled to depart on December 4 from the Cape Canaveral Air Force Station in Florida.

Once the barley makes it to space, it will stay in orbit for a month before making a return to Earth.

While it stays in space, the group will be conducting experiments to see how barley seeds react to the microgravity environment.

The research is expected to offer insight on what will be necessary to create beer on Mars as well as provide information on the future production of barley here on Earth.

The return to Earth will also be monitored and&nbsp;analysed for further enquiry.

In a statement, Ricardo Marques, vice president Budweiser said, &ldquo;We are excited to begin our research to brew beer for the red planet. Budweiser is always pushing the boundaries of innovation and we are inspired by the collective American Dream to get to Mars.&quot;

The company along with researchers are sending barley seeds to International Space Station for studying their existence in space, reproduction and more

Alcohol brand Budweiser might soon become the first beer on Mars, after making announcements to send barley, one of the key ingredients in beer, to be studied on the International Space Station. According to the plans, Budweiser, along with several researchers, will initiate two barley experiments via SpaceX’s upcoming cargo supply mission. The mission is scheduled to depart on December 4 from the Cape Canaveral Air Force Station in Florida. Once the barley makes it to space, it will stay in orbit for a month before making a return to Earth. While it stays in space, the group will be conducting experiments to see how barley seeds react to the microgravity environment. The research is expected to offer insight on what will be necessary to create beer on Mars as well as provide information on the future production of barley here on Earth. The return to Earth will also be monitored and analysed for further enquiry. In a statement, Ricardo Marques, vice president Budweiser said, “We are excited to begin our research to brew beer for the red planet. Budweiser is always pushing the boundaries of innovation and we are inspired by the collective American Dream to get to Mars."

Budweiser to become first beer on Mars, soon!

Anheuser-Busch InBev and SABMiller received approval for their $107 billion merger from US antitrust regulators on Wednesday after the companies agreed to unload beer assets and preserve competition from independent craft brewers. 
 
The department of justice (DOJ) approval comes with a number of stipulations and is notable after the regulatory authority derailed several recent mega-mergers over antitrust concerns. 
 
The Belgian brewer will make concessions beyond its publicly stated offer to sell it stake in MillerCoors, its US joint venture with London-based SAB, as part of the deal. AB InBev will also have to curb its use of incentive programs to limit competition. 
 
Reuters previously reported that the department was investigating AB InBev&#39;s practice of financially rewarding beer distributors for selling more of its own beer than its competitors. Craft beer companies had vocally objected to the practice, which they argued hurt their ability to sell. 
 
&quot;Independent distributors that sell (AB InBev&rsquo;s) beer will have the freedom to sell and promote the variety of beers that many Americans drink,&quot; deputy assistant attorney general Sonia Pfaffenroth of the justice department&#39;s antitrust division said. 
 
The world&#39;s top two brewers hold brands Budweiser, Stella Artois, Miller and Pilsner Urquell. 
 
&quot;While we will make some adjustments to certain aspects of our US sales programs and policies, our fundamental approach and commitment to this market will not change,&quot; said AB InBev chief executive Officer Carlos Brito in a statement. 
 
AB InBev will also be required to secure the DOJ&#39;s approval before acquiring any beer distributors or craft beer brands. 
 
AB InBev has already acquired several regional craft beer companies, looking to benefit from a rapidly growing niche market in the slowing beer industry. Recent deals include Colorado-based Breckenridge Brewing, Oregon-based 10 Barrel Brewing and Virginia-based Devil&rsquo;s Backbone Brewing Company. 
 
&quot;The DOJ&rsquo;s significant requirements... appear to address some of our major apprehensions with the merger. With effective enforcement of these provisions, small brewers can rely on their independent distributor partners to access the market,&quot; Bob Pease, president and chief executive officer of the Brewers Association, said in a statement on Wednesday. 
 
Terms of AB InBev&#39;s agreement with the DOJ expire in 10 years. 
 
AB InBev will also divest the rights to all SABMiller beer brands currently imported or licensed for sale in the United States. 
 
Denver-based Molson Coors Brewing Co will buy SAB&#39;s 58 per cent stake in their US joint venture, MillerCoors. Molson closed up 3 per cent at $100.8 on Wednesday. 
 
The deal changes little within the US market, according to Adam Fleck, equity analyst with Morningstar in Chicago. Still, he added &quot;There&#39;s a chance to increase the profitability for Molson Coors and MillerCoors enterprises that will make MillerCoors more competitive.&quot; 
 
Globally, the deal positions the combined companies to produce almost a third of the world&#39;s beer, dwarfing other major producers like Heineken and Carlsberg. InBev will have more breweries in Latin America and Asia and an entrance to Africa, as major markets such as the United States weaken due to craft beer popularity. 
 
Australia, Europe and South Africa have cleared the deal. The companies are waiting for China to approve it although a proposed sale of SABMiller&#39;s stake in CR Snow was expected to lead to clearance. 
 
AB InBev reaffirmed its plan to close the deal by the end of the year. Shares of the company rose earlier after the DOJ announcement but were down less than 1 per cent at $112.95 in late trade in New York. SABMiller closed up less than 1 per cent in London. 
 
(Reuters)

The companies agreed to unload beer assets and preserve competition from independent craft brewers

Anheuser-Busch InBev and SABMiller received approval for their $107 billion merger from US antitrust regulators on Wednesday after the companies agreed to unload beer assets and preserve competition from independent craft brewers. The department of justice (DOJ) approval comes with a number of stipulations and is notable after the regulatory authority derailed several recent mega-mergers over antitrust concerns. The Belgian brewer will make concessions beyond its publicly stated offer to sell it stake in MillerCoors, its US joint venture with London-based SAB, as part of the deal. AB InBev will also have to curb its use of incentive programs to limit competition. Reuters previously reported that the department was investigating AB InBev's practice of financially rewarding beer distributors for selling more of its own beer than its competitors. Craft beer companies had vocally objected to the practice, which they argued hurt their ability to sell. "Independent distributors that sell (AB InBev’s) beer will have the freedom to sell and promote the variety of beers that many Americans drink," deputy assistant attorney general Sonia Pfaffenroth of the justice department's antitrust division said. The world's top two brewers hold brands Budweiser, Stella Artois, Miller and Pilsner Urquell. "While we will make some adjustments to certain aspects of our US sales programs and policies, our fundamental approach and commitment to this market will not change," said AB InBev chief executive Officer Carlos Brito in a statement. AB InBev will also be required to secure the DOJ's approval before acquiring any beer distributors or craft beer brands. AB InBev has already acquired several regional craft beer companies, looking to benefit from a rapidly growing niche market in the slowing beer industry. Recent deals include Colorado-based Breckenridge Brewing, Oregon-based 10 Barrel Brewing and Virginia-based Devil’s Backbone Brewing Company. "The DOJ’s significant requirements... appear to address some of our major apprehensions with the merger. With effective enforcement of these provisions, small brewers can rely on their independent distributor partners to access the market," Bob Pease, president and chief executive officer of the Brewers Association, said in a statement on Wednesday. Terms of AB InBev's agreement with the DOJ expire in 10 years. AB InBev will also divest the rights to all SABMiller beer brands currently imported or licensed for sale in the United States. Denver-based Molson Coors Brewing Co will buy SAB's 58 per cent stake in their US joint venture, MillerCoors. Molson closed up 3 per cent at $100.8 on Wednesday. The deal changes little within the US market, according to Adam Fleck, equity analyst with Morningstar in Chicago. Still, he added "There's a chance to increase the profitability for Molson Coors and MillerCoors enterprises that will make MillerCoors more competitive." Globally, the deal positions the combined companies to produce almost a third of the world's beer, dwarfing other major producers like Heineken and Carlsberg. InBev will have more breweries in Latin America and Asia and an entrance to Africa, as major markets such as the United States weaken due to craft beer popularity. Australia, Europe and South Africa have cleared the deal. The companies are waiting for China to approve it although a proposed sale of SABMiller's stake in CR Snow was expected to lead to clearance. AB InBev reaffirmed its plan to close the deal by the end of the year. Shares of the company rose earlier after the DOJ announcement but were down less than 1 per cent at $112.95 in late trade in New York. SABMiller closed up less than 1 per cent in London. (Reuters)

AB InBev, SABMiller deal wins US approval, adds craft beer protections

South Africa&#39;s competition tribunal today approved the buyout of SABMiller by the world&#39;s top brewer AB InBev, subject to conditions, paving the way towards completion of the huge deal. 
 
Conditions include the sale of SABMiller&#39;s stake in Distell Group, as South Africa&#39;s regulator moved to protect competition and prevent job losses in the country&#39;s struggling economy. 
 
AB InBev&#39;s acquisition of the London-based SABMiller was valued at $121 billion when it was announced in November and in line to be the third largest in history if it clears all regulatory hurdles. 
 
However, it is now worth considerably less given the plunge in the value of the pound after Britain&#39;s vote to leave the European Union. 
 
Current exchange rates put the value of the acquisition around $106.5 billion for Belgium-based AB InBev. 
 
&quot;The competition tribunal approved the merger between beer giants Anheuser-Busch InBev (AB InBev) and SABMiller plc subject to wide ranging conditions designed to address both public interest and competition concerns,&quot; the tribunal said in a statement. 
 
AB InBev, brewer of Stella Artois and Budweiser, secured approval from EU and Australian regulators in May. 
 
Clearance has also been granted by several other countries including India, South Korea, Mexico and Chile. 
 
The acquisition is poised to get approval from both the US justice department and China&#39;s ministry of commerce, Bloomberg reported today. &quot;We are delighted by the competition tribunal&#39;s decision to approve our proposed combination with SABMiller in South Africa, a market that would play a critical role in the combined company,&quot; the company said. 
 
&quot;We recognise South African Breweries important contribution to the country&#39;s economy and society and look forward to building on this through the commitments we have made on jobs,&quot; the company added. 
 
Isaac Matshego, economist at Nedbank, said he hoped the takeover would bring investment into South Africa and boost local production infrastructure. 
 
&quot;If it does go through, AB InBev could use South Africa as its base for expansion to the rest of the continent, in that way preserving the thin job market,&quot; he said.&nbsp; 
 
&quot;Naturally, everyone is concerned about jobs at the moment and it is important that AB InBev finds our local market attractive enough for investment,&quot; Matshego said. 
 
AB InBev sees the buyout of SABMiller as a key way to counterweight falling beer demand in big markets by building its presence in Africa and other regions where sales are rising. 
 
SABMiller, which generates nearly a third of its profits from Africa, operates in 15 African countries, and has a stake in 22 others through a partnership with French firm Castel. 
 
The company has its roots in supplying beer to miners during the 1886 Johannesburg gold rush. 
 
In April, AB InBev said it would sell SABMiller&#39;s stake in leading Chinese beermaker Snow Breweries, in a move that appeared aimed at persuading Chinese regulators to sign off on the giant merger deal. 
 
(AFP)

AB InBev's buyout of SABMiller to counter falling beer demand in big markets by establishing presence in Africa where sales are on the rise

South Africa's competition tribunal today approved the buyout of SABMiller by the world's top brewer AB InBev, subject to conditions, paving the way towards completion of the huge deal. Conditions include the sale of SABMiller's stake in Distell Group, as South Africa's regulator moved to protect competition and prevent job losses in the country's struggling economy. AB InBev's acquisition of the London-based SABMiller was valued at $121 billion when it was announced in November and in line to be the third largest in history if it clears all regulatory hurdles. However, it is now worth considerably less given the plunge in the value of the pound after Britain's vote to leave the European Union. Current exchange rates put the value of the acquisition around $106.5 billion for Belgium-based AB InBev. "The competition tribunal approved the merger between beer giants Anheuser-Busch InBev (AB InBev) and SABMiller plc subject to wide ranging conditions designed to address both public interest and competition concerns," the tribunal said in a statement. AB InBev, brewer of Stella Artois and Budweiser, secured approval from EU and Australian regulators in May. Clearance has also been granted by several other countries including India, South Korea, Mexico and Chile. The acquisition is poised to get approval from both the US justice department and China's ministry of commerce, Bloomberg reported today. "We are delighted by the competition tribunal's decision to approve our proposed combination with SABMiller in South Africa, a market that would play a critical role in the combined company," the company said. "We recognise South African Breweries important contribution to the country's economy and society and look forward to building on this through the commitments we have made on jobs," the company added. Isaac Matshego, economist at Nedbank, said he hoped the takeover would bring investment into South Africa and boost local production infrastructure. "If it does go through, AB InBev could use South Africa as its base for expansion to the rest of the continent, in that way preserving the thin job market," he said. "Naturally, everyone is concerned about jobs at the moment and it is important that AB InBev finds our local market attractive enough for investment," Matshego said. AB InBev sees the buyout of SABMiller as a key way to counterweight falling beer demand in big markets by building its presence in Africa and other regions where sales are rising. SABMiller, which generates nearly a third of its profits from Africa, operates in 15 African countries, and has a stake in 22 others through a partnership with French firm Castel. The company has its roots in supplying beer to miners during the 1886 Johannesburg gold rush. In April, AB InBev said it would sell SABMiller's stake in leading Chinese beermaker Snow Breweries, in a move that appeared aimed at persuading Chinese regulators to sign off on the giant merger deal. (AFP)

South Africa approves takeover of SABMiller by top brewer AB InBev

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