Fujian tycoon to buy stake in Tsingtao from AB InBev

Chen Fashu, one of the mainland's richest men, has agreed to pay Anheuser-Busch InBev US$235 million for its 7 per cent stake in Chinese beer maker Tsingtao Brewery.

The deal will not only help AB InBev - the world's biggest beer maker - cut its huge debt but will also reduce recent public concern on the mainland that a historic brand could fall into foreign hands.

Belgium-based AB InBev said in a statement yesterday Mr Chen had agreed to buy 91.64 million H shares in Tsingtao at HK$19.83 each, a 9.86 per cent discount to yesterday's closing price of HK$22.

The sale of shares came on the heels of AB InBev saying it would raise US$1.8 billion by selling South Korea's Oriental Brewery to private equity firm Kohlberg Kravis Roberts.

The owner of Budweiser and Stella Artois is trying to sell off units to help pay off the loans that funded InBev's US$52 billion takeover of Anheuser-Busch.

In January, it announced it was selling 19.99 per cent out of its 27 per cent stake in Tsingtao to Japan's Asahi Breweries for US$667 million.

'The deal has cleared the uncertainty in foreign ownership that has hung over Tsingtao since the merger of AB and InBev last year,' said Olive Xia, an analyst at Core Pacific-Yamaichi International. 'Although Mr Chen has no prior investments in the beer sector, the public would be happy to see a Chinese investor.'