SABMiller bows out over Harbin

SABMiller has confirmed that it will not proceed with its €500 million offer for Harbin Brewery, in a move that cedes control of the key China brewer to rival Anheuser-Busch. The company said that it will now accept the offer of HK$5.58 (€0.60) per share that Anheuser-Busch​ (AB) will be making for its 28 per cent stake in the Harbin Brewery.

AB will pay SABMiller​ US$211 million (€172m) from which the company said that it will realise a 'substantial' profit over the price it paid to purchase the stake in Harbin Brewery in July 2003. SABMiller said that accepting the offer was in the best interests of its shareholders.

Although the company said that synergies would have made the Harbin operations a great asset to its operations in China, the company added that it would not pursue the deal at all costs.

Commenting on the announcement SABMiller CEO Graham Mackay said, "We remain fully committed to the Chinese beer market and we must evaluate every potential acquisition on its merits. We believe that the AB offer price for Harbin more than fully values the business, even after taking into account the significant synergies uniquely available to us."​

The company said that despite the outcome over the Harbin deal, it still fully intended to pursue growth in the China market. Analysts took the comments that the company is still clearly committed to the market.

Although Harbin is only a regional beer producer and is little known outside its home territory. Despite this fact its Hapi brand beer is seen as a valuable asset in a market where growth is set to turn the market into the driving force in both domestic and global terms.

Last week AB upped its stake in Harbin from 29 per cent to 36 per cent, a move that was widely seen as a sign that the brewer was being favoured in the bidding war. Insiders say that AB has developed strong business links with Harbin and Chinese local authorities, which may well have swayed the deal its way.