InBev buys controlling stake in Lion beer

InBev​ bought the first 50 per cent stake from the company back In September 2003, from Lion Diversified Holdings Berhad, which is a diversified Malaysian group, for exactly the same amount, $131.5 million. At the time Lion transferred the management control of the strategic partnership to InBev.

The transaction is expected to be completed by the beginning of October, which will see the end of Lion's brewing operations in China.

Lion Diversified Holdings is listed on the Kuala Lumpur Stock Exchange (KLSE), and realised a total beer volume of 13 million hectoliters in 2003. Its beer operations form part of its retail division and trading division, which in turn forms a multi billion business empire with interests in property, communications, steel and the auto industry. In recent years the company shifted its China activities towards the manufacturing of computer technologies and retail.

InBev said that the transaction complied with its acquisition criteria in China, namely significant potential to grow outside both local and regional markets through strong brands, volumes, economies of scale, and critical mass; continued focus on the core-lager segment; and solid, dependable, management resources.

With China now the world's largest beer market by volume, all the international brewers are currently acquisitive there. This has resulted in a flurry of activity, with the likes of SABMiller, Carlsberg, Heineken and Anheuser-Busch all making major purchases on the market in recent months. But according to market analysyts Access Asia, the China market remains localised and fragmented, giving reason to believe that there still remains plenty more scope for further acquisitions.

InBev is the third-largest brewer in China, with 30 million hectoliters of capacity, produced by 18 breweries, and present in 6 major provinces: Zhejiang, Guangdong, Hubei, Hunan, Jiangsu and Shandong.