Belgian beer brewery, InBev purchased American based Anheuser-Busch Companies (AB) at a price of US$52 billion.

InBev Global announced yesterday on its website that InBev and AB have agreed on a combination in which AB's shareholders will receive US$70 per share in cash, for an aggregate equity value of US$52 billion. The merged company will be called Anheuser-Busch InBev. Budweiser, which is under AB's name, will be the flagship brand of the new combined entity.

"The merger and acquisition will have strategic impact on our Chinese market", said Yan Zhimin, a senior professional analyst.

The rapidly growing Snow Beer made by China Resource Company replaced Tsingtao Beer as the top selling beer in Chinese markets with the gap that is still widening. AB's assets in China include Budweiser, Harbin Brewery and 27 percent of Tsingtao Brewery's total shares.

AB will potentially overtake numerous Chinese markets where Tsingtao Beer and Pearl River Beer, a popular brand in southern China, had previously been dominant. Therefore, InBev not only assumes the top position in China but also marches forward complementarily with AB in the Chinese market as a result of this acquisition.

Entering China in 1984, InBev now holds 33 individual investments and joint-ventures. It ranks among the top two brands in the markets of several southern provinces like Fujian and Zhejiang. InBev points out its business in southeastern China will be enhanced by AB's strength in northeast China, which are represented by Harbin Brewery as well as Tsingtao Brewery. Tsingtao's products are most prevalent in the markets of Shandong Province, south and northwest China. Meanwhile, InBev's lack of a national premium brand in China will be compensated by Budweiser.

However, an anonymous insider said that, "the integration of their Chinese markets will be a difficulty." Broad market areas, various brand systems and breweries from different backgrounds are all factors contributing to this difficulty. At the same time competition is also expected to increase amongst related subsidiaries.

For more details, please read the full story in Chinese (http://www.china-cbn.com/s/n/000005/20080715/020000083730.shtml).

(China.org.cn July 15, 2008)