Belgian beer maker Interbrew has signed an agreement to take a controlling stake in a Chinese brewer in the latest acquisition by a foreign drinks firm looking to quench the thirst of mainlanders.
Faced with saturated home markets, international beer giants are rushing to form alliances or take direct stakes in mainland brewers.
Interbrew, one of the world's leading brewers, yesterday said it had agreed to buy a 70 per cent stake in the brewing operations of Ningbao-based KK Group for about US$42 million.
The deal comes just a few months after the giant brewer announced it had completed a framework agreement to acquire a 24 per cent stake in one of the mainland's largest breweries, Zhujiang Beer Group.
KK Brewery, located in the city of Ningbo in eastern China, is the leading brewer in Zhejiang province, according to Interbrew. KK Brewery, whose main brands are KK and Zihulin, is said to have an 80 per cent market share in Ningbao with an annual production volume of just under 303,000 tonnes.
The deal represents a price equal to 7.5 times the firm's earnings before interest, tax and depreciation and amortisation. The deal was in line with the company's expansion strategy in eastern China, an executive with Interbrew said.
'It is also a natural extension of its local platform from Nanjing further into Zhejiang,' she said.