 | E-Malt.com News article: 3266
China: Lion Nathan Limited in deal to sell Chinese beer business for $A219 million. Lion Nathan Ltd said today it has entered into an unconditional agreement to sell its Chinese beer business, Lion Nathan China, to China Resources Breweries (CRB) for $US154 million ($NZ236m). The sale follows the conclusion of a competitive sales process, ShareChat News posted on September 15, 2004.
CRB is a joint venture owned by SABMiller and China Resources Enterprises, and is the second largest brewer in China, operating more than 30 breweries in the Chinese mainland. The sale price represents a premium to the book value of Lion Nathan China of around $A120 million ($NZ129 million). The consideration comprises approximately $US71 million in cash as well as the assumption by CRB of about $US83 million in debt. Completion is expected to occur on September 30.
"This is an excellent outcome for Lion Nathan and its shareholders," said Lion Nathan chief executive officer Gordon Cairns. "It can be attributed to a number of factors including the quality of our assets and brands, the strategic importance of our operations in the rapidly consolidating Yangtze River Delta beer market and the outstanding job the Lon Nathan China team has done in building our business in China," he said.
Lion Nathan chief financial officer Jamie Tomlinson said the decision to sell the Chinese beer business followed a detailed review of Lion Nathan's competitive position in China. He said the options considered included increasing the scale of the business through acquisitions, participating in the consolidation of the Chinese beer market by way of a merger or joint venture, or selling the business into the current wave of industry consolidation.
"Having considered all of these options, Lion Nathan concluded that this sale was the best outcome for Lion Nathan shareholders especially given the capital and profit risk associated with remaining in China," he said. The proceeds of the sale will be applied to debt reduction, Tomlinson said.
15 September, 2004
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