E-Malt.com News article: 4665

China: Tsingtao Brewery Co., Ltd. and Anheuser-Busch Cos., Inc. jointly announced on April 11 that Anheuser-Busch has increased its economic interest in Tsingtao to 27 % upon its conversion of all the remaining convertible bonds in Tsingtao. The Qingdao State-Owned Assets Supervision and Administration Commission (SASAC) remains the largest shareholder in Tsingtao, holding a 30.6 percent share. Anheuser‑Busch is the largest non‑government shareholder.

The request by Anheuser-Busch to convert its remaining Tsingtao bonds (HK$1,135,395,342) to newly issued “H” shares of Tsingtao under the terms of the Strategic Investment Agreement with Tsingtao was approved by Tsingtao’s board today. 248,219,178 newly issued “H” shares of Tsingtao stock listed on the Hong Kong Stock Exchange will be issued to Anheuser-Busch. The total capital stock of Tsingtao will increase to 1,308,219,178 shares, 50 percent of which is “H” shares. With this conversion, Anheuser-Busch’s economic interest in Tsingtao increases from 9.9 to 27 percent. Based on the Strategic Investment Agreement between Anheuser-Busch and Tsingtao, the voting rights of 7 percent of the above-mentioned shareholding will be held by the SASAC on trust under a Voting Trust Agreement. Accordingly, Anheuser-Busch’s voting interest in Tsingtao will be 20 percent, and SASAC’s voting interest will be 37.6 percent. Anheuser-Busch retains full economic rights to its 27 percent economic stake.

As a result of the increase in shareholding of Tsingtao, Anheuser-Busch will nominate one additional director to the Tsingtao Brewery board of directors, giving Anheuser-Busch two seats on Tsingtao’s board.

“The shareholding and management structure of the company have been optimized after Tsingtao built a strategic relationship with Anheuser-Busch. The existing board and supervisory directors from Anheuser-Busch have brought new ideas on management to Tsingtao, improving management and technology of Tsingtao, helping the company to achieve the goal of internationalization,” said Li Guirong, the chairman of Tsingtao’s board.

“We have built a strong partnership with Tsingtao as a result of our strategic alliance and the ongoing exchange of best practices being implemented by our on-site team and key management in Tsingtao,” said Patrick T. Stokes, president and chief executive officer, Anheuser-Busch Cos., Inc. “This transaction increases our equity stake and reflects our continued confidence in Tsingtao’s position in the China beer industry and our strong relationships with the Tsingtao Brewery management and the City of Qingdao.”

Tsingtao Brewery Co., Ltd. is the largest brewer in China with its headquarters in Qingdao city, Shandong Province, China. It has 50 breweries in 18 provinces and cities in China with a majority share in the key markets in the most economically developed areas such as Shandong, Shanghai, Guangdong, Shanxi, Jiangsu, Beijing and Fujian. The capacity of the breweries is more than 5 million kilolitres per year. In 2004, Tsingtao sold 3.71 million kilolitres, being the No. 1 in volume and production, market share, sale income, gross profit and foreign exchange income in China.

Based in St. Louis, Anheuser-Busch is one of the world’s largest brewers and is the No. 1 brewer in the United States with a 50 percent market share. The company’s Budweiser brand is sold in countries around the world. In addition to the United States, Anheuser-Busch has breweries in the United Kingdom and China; holds a 50 percent share in Grupo Modelo, Mexico’s leading brewer; and has equity investments in Tsingtao, the leading brewer in China, and Compañía Cervecerías Unidas Argentina.


12 April, 2005