China Resources Snow announced a wholly-owned acquisition of Henan Oak beer

On January 11, 2011, China Resources Snow announced its wholly-owned acquisition of Henan Oak Beer Industry Co., Ltd. (hereinafter referred to as Oak beer). According to industry sources, the price of this acquisition is more than 300 million yuan.

China Resources Snow said that the acquisition includes three factories in Zhengzhou, Luohe and Anyang and related assets in the beer business, including 3 plants with an annual capacity of 290,000 liters. After the acquisition is completed, China Resources Snow will invest an additional 400 million yuan in newly purchased plants for large-scale technology upgrades and relocation and expansion in other places. Among them, the first phase expansion capacity will reach 400,000 kiloliters. Together with the previous Zhumadian plant, the acquisition will increase China Resources Snow's production base in Henan Province to four, with a production capacity of 600,000 kiloliters.

Xu Hui, general manager of China Resources Snow Beer (Anhui) Co., Ltd., which is responsible for managing the Henan market, said that in the next 3 to 5 years, China Resources Snowflake's goal in the Henan market is to increase the market share to more than 50%. For the merged company, Xu Hui said China Resources Snow will retain its brand and adopt differentiated product strategies to meet market demand.

It is understood that there are 42 beer companies in Henan Province. The top four beer brands are Venus Beer, Weixing Beer, Oak Beer and Yueshan Beer. Among the above four brands, Yueshan Beer has been acquired by Yanjing Beer; China Resources Snow has acquired Oakland Beer with a purchase price of RMB 27 million and then won the Oak Beer. A few days ago, Vishu Beer and Anheuser-Busch InBev signed a framework agreement for the acquisition of 600 million yuan. In addition, although Tsingtao Brewery did not successfully acquire Weishun Beer, its current sales in Henan Province cannot be underestimated. According to industry sources, Tsingtao Brewery currently sells about 120,000 tons in Henan Province.

In Henan's beer market, China Resources Snow, Tsingtao Brewery, Anheuser-Busch InBev and Yanjing Brewery are four giants, gradually forming a quarter. More local SMEs have gradually reduced their living space in the expansion and merger of giants. Henan's first brand, Venus Beer, is one of the representative companies that survives in the gap between the giants. Although Venus has a considerable market share, it is the largest in squeeze.

When it comes to quarters, one analyst believes that although Anheuser-Busch InBev has a strong production base in Henan Province, a significant portion of the products are exported to other provinces, and the company's market sales are not outstanding. In addition, Yanjing bought Yueshan Beer. From the current market performance, it has not yet formed a certain market size.

Xu Hui said that despite the large number of beer companies in Henan Province, they are mostly small and medium-sized enterprises. Small companies with an annual output of 100,000 tons or less account for a large proportion. Most of these enterprises are collectively-owned village-owned enterprises, and the ownership of all the equity is relatively complex. Because it involves the ownership of multiple interests such as businesses and villagers, it is difficult for capital power to intervene in acquisitions. Due to the above reasons, an industry source told the Daily Economic News (Weibo) reporter that China Resources Snow launched a climax of mergers and acquisitions of Henan beer companies, but the pace of mergers and acquisitions will gradually slow down. After several beer giants have put high-quality resources in their arms, they will slowly integrate existing resources to achieve full integration of the brand and the local market.

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