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Last Updated: Tuesday, 1 June, 2004, 08:55 GMT 09:55 UK
China brewery takeover hots up
Michelob Ultra beer
Anheuser-Busch brands include Budweiser and Michelob
Anheuser-Busch has raised its stake in north China brewer Harbin Brewery to 36%, the level at which it is obliged to make a takeover offer.

The world's biggest brewer is battling for control of Harbin with global second ranked brewer SABMiller.

Anheuser-Busch paid HK$388m ($49.8m) for an extra 6% of Harbin, whose shares were suspended in Hong Kong beforehand.

Shares in Harbin have risen nearly 60% in a month since the rival overseas giants began their bidding war.

Harbin is based in north China and is the country's fourth biggest brewer.

Thirsty to win

For its extra stake, Anheuser-Busch paid HK$5.58 a share.

It will now have to pay at least that when it bids for the rest of the shares in Harbin that it does not already own.

The battle between the US giant and its South African rival broke out in early May.

Anheuser-Busch bought a 29% stake in Harbin at the start of May for HK$3.70 a share.

SABMiller, which already owned a 29% stake bought in 2003, then weighed in with a hostile takeover offer pitched at HK$4.30 a share, totalling HK$4.31bn.

The price for Harbin could now be set to go higher. Much depends on whether SABMiller makes a counter-bid or walks away.

Even if it does not make a counter-bid, the takeover is expected to cost Anheuser-Busch more than $700m.

China's beer market is growing at up to 8% a year and consumption per head remains low by international standards, triggering a flood of investment from big international brewers.

Anheuser-Busch, which brews the Budweiser brand, owns 10% of market leader, Tsingtao, while SABMiller has a 49% stake in the Chinese number two brewer, China Resources Breweries.

Heineken, Carlsberg Breweries and Scottish and Newcastle have all made recent investments in Chinese beer makers.

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