SABMiller has begun a hostile $550 million offer for Harbin Brewery today to intensify a fight for Chinese market share with larger rival Anheuser-Busch.
In a 40-page document, SABMiller, which offered HK$4.30 for each Harbin share, said majority ownership of Harbin, China's fourth-largest brewery, would offer a strategic fit to its existing joint venture operation, China Resources Breweries (CRB), in northeast China.
"We are the natural suitor for this business... we think shareholders will view this favourably," Mr Andre Parker, the head of SABMiller's Africa and Asia operations, said.
But Harbin management has rejected the bid from the world's second-biggest beer maker, saying it would prefer to team up with Anheuser-Busch, which is expected to make a higher counter-offer.
Shares in Harbin Brewery ended trade on Friday at 4.975 Hong Kong dollars, 16 per cent above SABMiller's offer price.
Foreign brewers are scrambling to invest in China: It is the world's biggest beer market by volume but the average person drinks just 19 litres of beer a year - compared with about 50 in Japan and 84 in the United States.
Anheuser-Busch, maker of Budweiser beer, triggered the battle for Harbin by recently striking a deal to buy 29 per cent of the firm for $139 million, or 3.70 Hong Kong dollars a share. It said on May 19th it had completed the purchase.