Beijing Yanjing walks out on $700 million Kingway Brewery deal

Sources disclosed that China's fourth largest brewer, Beijing Yanjing has stormed out of a USD 700 million deal to procure brewery assets of China Kingway Brewery Holdings, subsidiary of the biggest Hong-Kong enterprise owned by Government, Guangdong Holdings.

Aggressive competition and escalating costs had compelled Kingway to invite bids for equity stakes in six of his breweries, all beer and beer-related trademarks as well as its domestic and overseas distribution networks.

After overriding world's largest brewer, Anheuser-Busch InBev NV, in the bid's last round, Yanjing was inches close to snapping up the deal but withdrew as the two breweries were unsuccessful in settling upon a price.

Yanjing would have significantly profited from the deal with China's beer consumption on the rise and projected to grow 5 per cent p.a., but sources say that now the whole process might have to be started again.

Kingsway's shares plummeted a further 6.7 per cent in Hong Kong, while Yanjing's shares edged up 0.7 per cent.