Investing.com - Alcoholic beverage retailer China Resources Beer Holdings Co Ltd (HK:0291). acquired seven of Heineken’s China and Hong Kong businesses via its wholly-owned subsidiary China Resources Snow Breweries in a deal worth more than HK$2.35 billion (US$300 million), according to the company’s statement on Monday.
Despite the M&A deal, shares of China Resources Beer slid 3.81% to HK$27.75 in the morning.
Under the partnership, the Holland-based company will license the brand in China to China Resources Beer on a long-term basis. Heineken will also own a 40% stake in China Resources Beer, while the latter’s parent company, China Resources Enterprise Limited will own the remaining 60%.
Heineken N.V. will invest a total of €1,948 million (US$248.7 million) with the acquisition of shares of China Resources Beer and will contribute its operating entities in China. The two entities will enter into a trademark licensing agreement for the Heineken brand in China, and CR Beer will leverage Heineken’s global distribution channels to grow the brand in China.
Heineken stated that if regulatory approval is obtained, the transaction is expected to complete in 2019.