Dutch premium brewer Heineken which is the world’s second-largest beer maker is reportedly acquiring 40 percent stake in China’s CR Beer Co Ltd (China Resources Beer).
According to the statement of CR Beer, the deal is worth $3.1 billion, and post-acquisition, Amsterdam-based Heineken will have a greater access to the network of China’s premium beer space and a better understanding of the Chinese market.
CR Beer is the largest brewer in China and is known for manufacturing the best-selling Snow Beer brand. This purpose of the company behind this deal is to further develop and enhance the high-end market of beer in China.
With the help of Heineken’s international distribution network, the brewer will be able to boost up the growth of Snow Beer and other brands in the international markets. The deal may also offer important long-term strategies and opportunities for expansion.
“The domestic beer industry has entered a bottleneck period. In recent years, the sales growth of high-end beer is higher than traditional beer, and many international beer brands have accelerated their steps to expand in the China market, indicating that the future of China’s beer market will develop with a high-end trend,” said Neil Wang, president of consulting company Frost & Sullivan in China.
And for the moment, CR Beer’s parent company China Resources Enterprise Ltd which focuses will buy 0.9 percent of Heineken shares for $537.5 million. The parent company focuses on three business segments, beer, food and beverages.
According to the statement, Heineken will license its brand trademark in the Chinese mainland, Hong Kong and Macao to CR Beer, and merge its China operations with that of CR Beer. CR Beer makes up the largest market share in China which accounts for 25.6 percent of the beer market in the country.