Jasmine Wang and Tan Hwee Ann Tokyo
CHINA Resources Enterprise is hiving off its non-beer assets, including a loss-making retail venture with Tesco, to focus on selling the world’s most popular beer with partner SABMiller.
The company would sell the non-beer assets for HK$28 billion (R44bn) and as much as a 10 percent stake to its state-owned parent, China Resources Enterprise said yesterday.
The parent would offer HK$12.70 a share for the stake, it also said.
The operator of hypermarkets and seller of China’s Snow Beer is struggling amid a slowdown in the Chinese economy, having posted a full-year loss in March. China Resources yesterday also said that it would hand out a special dividend of HK$11.50 a share, which its parent would use to pay for the asset purchase.
The deal would turn China Resources Enterprise “into a beer-focused business that owns the best-selling beer brand in the world since 2008 by sales volume, unburdened from the previous conglomerate structure”, the firm said.
Shares of the company last traded at HK$15.20 and were suspended since April 8 for the announcement. They have plunged 41 percent since the firm’s announcement in August 2013 to merge with Tesco’s loss-making China unit.
The unlisted parent, China Resources Holdings, would pay HK$13.6bn in cash for the non-beer assets, with the remaining sum to be paid upon receipt of its share of the special dividend, China Resources Enterprise said.
China Resources Enterprise has struggled to integrate Tesco’s stores in China. – Bloomberg