May. 7, 2012 (China Knowledge) - Beijing
Yanjing Brewery Co Ltd<000729
>, a leading Chinese beer supplier and controlled by Beijing
Enterprises Holdings Ltd<0392
>, is in exclusive talks to acquire the brewery operations of Kingway Brewery Holdings Ltd<0124
> for around US$700 million, said a person familiar with the matter.
An agreement would be reached next week at earliest, the person added.
In March, Beijing
Yanjing Brewery, Belgium-based beer giant Anheuser-Busch InBev N.V. and China Resources Snow Breweries Ltd, a joint venture between China Resources Enterprise Ltd<0291
> and SABMiller PLC, all submitted bids for the Kingway assets.
Kingway, which currently has a market capitalization of HK$4.5 billion, intends to sell the Kingway brand and the majority of its brewery facilities, but keep two beer plants, sources reported.
In 2011, Kingway saw sales revenue increase 7.7% from a year earlier to HK$1.76 billion, but its net profit declined 4.2% year on year to HK$34.7 million. Beer sales amounted to 93,400 tons last year, up 1% from a year earlier.