China Resources Snow Breweries, a joint venture between red chip China Resources Enterprise and London-listed SABMiller, will pay 749 million yuan (HK$850.19 million) for three mainland breweries to strengthen its foothold on existing markets.
The company said the acquisition, which includes a cash portion of 633 million yuan, would boost CR Snow's production capacity 4 per cent to 12.17 million kilolitres. It did not disclose how it would pay for the rest of the deal.
The deal will add one brewery each in Anhui, Liaoning, and Zhejiang provinces, where Snow has a combined 21 breweries.
'These acquisitions will enable us to strengthen our position with a wider geographical coverage and lower cost base,' said CRE managing director Chen Lang.
Analysts said the deal was attractive but the benefit would not be felt soon, given slowing demand amid the economic downturn.
Beer sales would be hit by a drop in mainland restaurant business as consumers tightened their purses, they said.
