AB InBev moved a step closer to completing its £71 billion ($91.22 billion) takeover of SABMiller, after China Resources Beer agreed to buy out the London-listed group's stake in their Chinese brewery joint venture.
China Resources Beer will acquire SABMiller's 49 per cent stake in China Resources Snow Breweries — the brewer of the world's top-selling beer — for $1.6 billion, ending a 22 year-old joint venture that produced voluminous vats but punier profits.
Investors applauded the deal, sending China Resources Beer's share price up as much as 34.6 per cent to HK$17.20 in morning trading in Hong Kong. The price of the deal was considerably below analysts' expectations.
The transaction is a key milestone for AB InBev as it has been shedding assets to win regulatory approval across the globe to close the largest beer deal in history, dubbed MegaBrew by analysts.
"This announcement represents the next step in AB InBev's continued commitment to proactively address regulatory considerations in its recommended acquisition of SABMiller," said AB InBev.
"The acquisition implies a total value for CR Snow of HK$25.4 billion, which is a 58 per cent discount to the valuation" implied by the market capitalization of the parent company CR Beer, wrote Jessie Guo, equity analyst at Jefferies in Hong Kong.