SABMiller has increased its stake in China''s fast-growing beer market with agreements to acquire four brewers for $79 million, in separate transactions, in mainly cash deals. Two of the breweries to be acquired are in Liaoning province one in Anhui and one in Hunan province.

The total investment cost for the four acquisitions is $79m, which includes a cash consideration of $57.

SABmiller says it has been beating local Chinese brewer Tsingtao in China and claims to have become the biggest Chinese brewer by sales volumes last year.

SABMiller, which makes brands such as Peroni and Hansa Pilsner, said it was making the acquisition through its 49-per cent stake in China Resources Snow Breweries (CR Snow). CR Snow was formed in a joint venture between SABMiller plc and China Resources Enterprise in 1994.

CR Snow will acquire an 80-per cent equity interest in Liaoning Yalujiang Brewery Company Limited and the brewing assets of Huludao Juhua Brewery Company Limited through a joint venture in which it will own an 85 per cent equity interest.

It is also acquiring the brewing assets of Anhui Wanpi Brewery Company Limited and a 100 per cent equity interest in Hunan Xinghua Brewery Company Limited.

Liaoning province is located in the north-east China where CR Snow has eight breweries and is the leading brewer. It has total production capacity of over 11 million hectolitres but the existing plants are close to full capacity.

The addition of Yalujiang Brewery at Dandong in south-eastern Liaoning and Juhua Brewery in western Liaoning will provide immediate additional production capacity of 2.7 million hectolitres. The breweries will also enhance distribution efficiency, extending CR Snow''s reach over this extensive province.

Wanpi Brewery, located in north-eastern county, Wuhe in Anhui province, will boost CR Snow''s production capacity to approximately 14 million hectoliters. It will also generate synergies with CR Snow''s existing breweries at Bengbu and Chuzhou, cementing a strong network in the northern region of Anhui. Currently, CR Snow is the largest brewer in the province with seven breweries.

Xinghua Brewery is situated at Yueyang in the north-eastern region of Hunan province and alongside the famous Dongting Lake. At present, CR Snow does not have any plant in Hunan province though a small quantity of SNOW was sold locally. The current annual production capacity of the brewery is 1.2 million hectolitres and it has the dominant market share in Yueyang.

"The acquisitions reflect our commitment to accelerate the national presence of Snow," said André Parker, managing director, SABMiller Africa and Asia. "Upon conclusion, they will add a total of about 5.0 million hectolitres to CR Snow''s current production capacity of close to 90 million hectolitres. The average attributable investment cost of around $18 per hectolitre, is very reasonable; reflecting our ability to expand profitably at low cost."

Mark Chen, managing director, China Resources Enterprise Limited, said, "The acquisitions in Liaoning and Anhui will generate synergies with our existing breweries, refine the distribution network and strengthen our leading position in the provinces. In Hunan, the acquisition will provide a solid platform for our national brand Snow to expand and concurrently complement our existing operation in Wuhan given its close proximity."

In November last year, SABMiller had said that CR Snow''s market share of the Chinese beer market had grown to 14.9 per cent, overtaking local leader Tsingtao, which had a market share of 13.8 per cent.

Snow is China''s best-selling beer. But until now, CR Snow has not had a presence in the country''s north-eastern Hunan province.

China''s annual beer consumption is about 300 million hectolitres.