Zhujiang Brewery gets approval for 1b yuan mainland IPO

Guangzhou Zhujiang Brewery, a regional beer maker 28.56 per cent owned by the world's largest brewer InBev, received regulatory approval yesterday for an initial public offering on the mainland to raise up to 1 billion yuan (HK$1.14 billion).

The China Securities Regulatory Commission has approved the brewer's plan to sell up to 70 million shares, equivalent to 10.29 per cent of its enlarged share capital, according to a statement on the regulator's website.

A source close to the company said the trading debut was expected in a couple of months but declined to say whether the stock would be listed in Shanghai or Shenzhen.

After the share sale, InBev's stake will be diluted to 25.62 per cent while the stake owned by municipal-government-controlled Guangzhou Zhujiang Brewery Group will fall to 52.94 per cent from 59.01 per cent, according to a document posted on the CSRC website.

Belgium-based InBev, which agreed to buy United States beer giant Anheuser-Busch earlier this month for US$52 billion, owns 33 regional brewers on the mainland.

By comparison, Anheuser-Busch has only two brewers, 13 plants in the Harbin Brewery Group and a 27 per cent stake in Tsingtao Brewery, although both are historic brands. It also imports beers including Budweiser.

Guangzhou Zhujiang Brewery is expanding output capacity and operations in other provinces to increase its market share amid fierce competition. It will use the proceeds from the share sale to build two plants in Hunan and Guangxi provinces, each with an annual production capacity of 200,000 kilolitres, according to the document.