AB InBev to Defy Expectations and Keep Hold of SABMiller’s Chinese Beer

29 Jan 2016 --- AB InBev is to try and keep hold of SABMiller’s China’s beer business CR Snow, according to a report.
The move is highly unexpected and is not what analysts expected, as they expected AB InBev would be forced to offload Snow, in order to get the green-light in China for its $108bn merger with SABMiller.

The merger between AB InBev and SABMiller, first announced last year, brings together the world’s biggest brewers into a company which controls about half the industry’s profits.

Snow, which is a mild lager, is hardly known outside of China, where it is mainly sold.

If AB InBev manages to keep hold of Snow then it could prove lucrative, as Snow is a fast growing brand which has big appeal to Chinese consumers, who are increasing their consumption of alcohol.

The fate of Snow is likely to be thrashed out in talks between AB InBev and China Resources Enterprise, which owns 51 per cent of the joint venture CR Snow.

According to the report, AB InBev will seek to hold on its stake in the joint venture and secure operational control.

But this is unlikely to be easy, as China Resources has the first option to buy out CR Snow.

According to analysts, SAB Miller’s 49 per cent interest in CR Snow is valued at $3.6bn.