The share price of Harbin Brewery Group surged 10.78 per cent yesterday after the completion of its deal with the world's second-biggest beermaker SABMiller.
As part of the HK$675 million deal, SABMiller takes close to a 30 per cent stake in Harbin via a newly created subsidiary and has appointed two non-executive directors to Harbin Brewery's board.
Nomura International analyst Phoebe Wong said that before the deal was rubber stamped yesterday there had been rumours it might be called off. 'Now we can rule out such rumours,' she said.
Phillip Securities research director Louis Wong Wai-kit described the surge as a 'knee-jerk reaction' by the market to the deal's closure.
Mr Wong said Harbin had traditionally limited its distribution to the northeast China where it is based, whereas rival brewer Tsingtao Brewery had much wider distribution. He said the market was speculating that the deal with SABMiller would allow Harbin much greater distribution, in the process giving it national status.
Nomura's Ms Wong compared the deal with the one signed in October last year involving Tsingtao, China's largest beer company, and Anheuser-Busch, the world's biggest brewer, which sent shares in the mainland group soaring more than 35 per cent. She expects a similar rise from Harbin's stock.