SABMiller vs. Anheuser-Busch: The Takeover Battle for Harbin Brewery

Commenting on this, Mackay said, "We are delighted to have made this strategic investment in Harbin, one of the most successful and profitable brewers in the Chinese market. The transaction represents a further step in SABMiller's strategy in China of focusing on local brands to build regional leadership, and strengthens our position in the world's largest beer market."

Peter Lo (Lo), CEO, Harbin, said, "We are very pleased to be partnering with one of the world's leading brewing groups, which has the ability to bring significant value to Harbin. Its brands, expertise and experience in developing countries are all extremely valuable to us..."

SABMiller realized the need to act fast, because with AB acquiring roughly equal stakes in Harbin, it would be difficult for it to leverage Harbin's leadership in the North and North Eastern regions to its advantage. Nigel Fairbrass (Fairbrass), the spokesman for SABMiller, said, "This town (Harbin) is too small for both of us." On May 05, 2004, SABMiller launched a takeover bid of US$ 550 mn for Harbin stock with independent shareholders (accounting for about 41.5% stake in Harbin), at HK$ 4.30 per share, a 33% premium over Harbin's closing price of HK$ 3.22 on April 30, 2004 (See Table III).

The offer was conditional on the acceptance leading to the company holding more than 50% of the issued share capital of Harbin.