China Resources Beer Holdings said on Tuesday its unit agreed to acquire a 55.19% stake in Chinese “baijiu” liquor maker Guizhou Jinsha Jiaojiu Winery Industry for about $1.7 billion, as it diversifies alcohol businesses with non-beer assets.
China Resources Wine Holdings Limited would boost capital in Jinsha Jiaojiu by 1.03 billion yuan ($141.70 million), after which it would hold 4.61% in the maker of “baijiu” – a pungent, colourless distilled spirit – and then buy another 50.58% stake for 11.27 billion yuan from Jinsha Jiaojiu’s existing shareholders, CR Beer said in a filing.
The acquisition is pending government regulatory approval, CR Beer said.
CR Beer bought a 40% stake in Shandong Jingzhi Baijiu, another baijiu manufacturer, through China Resources Wine Holdings by injecting 1.3 billion yuan last year, according to CR Beer‘s annual report of 2021.
Guizhou Jinsha Jiaojiu Winery Industry reported a net profit after taxation of 670 million yuan in the first half of this year, according to CR Beer‘s Tuesday filing. Last year it more than doubled its post-tax net profit to 1.3 billion yuan from 615.1 million yuan in 2020, the filing showed.
The latest baijiu deal by CR Beer, which owns the popular Chinese beer brand Snow, came amid uncertainties over consumer demand for liquor. China’s retail sales of tobacco and alcohol declined 8.8% year-on-year in September, data from the National of Statistics showed on Monday.
Reuters