Heineken has signed a deal to acquire a 40% interest in the company that controls China’s largest brewer as it aims to capitalise on premium beer growth in the country.
Under the agreement, Heineken will take a minority stake in CRH Beer, China Resources Beer’s parent company, for HKD $24.3 billion ($3.1 billion).
Meanwhile, China Resources Enterprise (CRE), which owns CRH Beer, will buy 0.9% of Heineken shares for €464 million. The companies said the deal represents a “long-term strategic partnership for Mainland China, Hong Kong and Macau”.
Heineken’s current operations in China will be combined with China Resources Beer’s operations and Heineken will license the Heineken beer brand in China to the firm.
Heineken and China Resources Beer said they are convinced that their strategic partnership will drive growth for their businesses. The partnership will enable CRE to advance its premiumisation strategy and it will help Heineken to significantly expand availability of the Heineken brand in China.
The Chinese beer market – which is the world’s largest – is becoming increasingly competitive as a rising middle class develops tastes for imported beers and premium brews. Earlier this year, AB InBev’s ZX Ventures opened a new craft brewery in Wuhan.
Heineken CEO Jean-François van Boxmeer said: “We very much look forward to joining forces with CRE and CR Beer, the undisputed market leader in China. We believe that our strong Heineken brand and marketing capabilities, combined with CR Beer’s deep understanding of the local market, its scale and best-in-class distribution network will create a winning combination in the growing premium beer segment in China.
“We look forward to working together with CRE’s leadership in our newly formed Strategic Advisory Council, and supporting CR Beer in its ambition to internationalise.”
CRE chairman Chen Lang added: “We are very excited about this partnership and see immense potential in the combined strengths of CR Beer and Heineken. With Heineken’s long heritage and world-class iconic brand portfolio, along with our leading presence and deep understanding of China, we believe we can win together in this new era of the Chinese beer market, in which the premium segment will become increasingly important.
“In Heineken we have found the perfect partner to achieve our ambitions in China and – as an international partner – to support us in growing our business outside China.”
As part of the deal Heineken and China Resources Beer will investigate which other premium brands from the Dutch brewer’s portfolio can be licensed to the firm China.
They will also look into whether Heineken’s global presence and marketing capabilities can be leveraged to support and accelerate the international growth of China Resources Beer’s Snow brand.
© FoodBev Media Ltd 2019