Heineken-APB Disposes Stake in Jiangsu DaFuHao Breweries

09/06/08 Heineken-APB, a joint venture company of Asia Pacific Breweries, is disposing its 49% stake in Jiangsu DaFuHao Breweries Co., Ltd in China. The stake will be sold to its partner, Nantong Fuhao Alcohol Industry Co. Ltd for approximately US$38 million (S$53 million). NAC owns the remaining 51% of DFH. Financial impact from the sale is not material.

HAPBC first invested in DFH in 2005 by purchasing a 40% stake. This stake was later increased to 49% in 2006.

Both HAPBC and NAC have agreed to terminate the partnership amicably as they hold differing views on the future development plans of DFH for the Jiangsu province. While HAPBC remains focused on the beer business, NAC has diversified into other alcoholic beverages.

This latest move does not mean that HAPBC is making an exit from the Jiangsu market. Said Mr Lee Meng Tat, Regional Director (China), Asia Pacific Breweries, “HAPBC remains committed to the Jiangsu province and the China market. Moving forward, HAPBC plans to further boost its brand presence and distribution which it has independently established for brands like Tiger, Heineken and Reeb in the 23-million hectolitre Jiangsu market.”

HAPBC owns two breweries in Shanghai and Hainan and is constructing a third in the Huangpu district of Guangzhou City in Guangdong. The new 2 million hectolitre brewery is expected to be ready by 2009, further tapping into the Chinese beer market which grew 12% in 2007 to 400-million hectolitres.