Molson Coors Brewing Company announced that it has signed an agreement to buy a 51percent controlling interest in a new joint venture with the Hebei Si’hai Beer Company of China for a total cash investment of approximately $40 million. Under the terms of the agreement, the joint venture will have direct control over the Si’hai brewing operations, including its contract brewing business, and provide opportunities to expand the sales and distribution of a portfolio of emerging brands led by Coors Light and regional Si’hai beers.
Since entering the Chinese market in 2003 with Coors Light, Molson Coors has enjoyed a rapidly growing business with its leading international brand, which is now available in more than 40 cities across China. Coors Light is currently the third-largest super premium brand sold in high end bars and night clubs throughout the country and has grown an average of approximately 30 percent each year. The joint venture, to be named Molson Coors Si’hai Brewing Company, will provide Molson Coors a platform to further expand its distribution channels throughout China and give the company greater control over brewing, increased cost efficiency, and more flexibility on packaging and brand innovation in order to grow in the market. The Molson Coors Si’hai venture will continue to market Si’hai brands as well as Coors Light.
“We’re very pleased with the growth we have experienced in China over the past seven years and have reached the point where we now need a stronger route to market and a more substantial platform to provide greater efficiency, flexibility and support for the continued growth of our Coors Light flagship brand,” said Kandy Anand, president, Molson Coors International.
“Our experience has shown us that these kinds of partnerships benefit not only our brands but also our customers and shareholders,” Anand continued. “As a leading global brewer, Molson Coors is proud to combine centuries of family brewing heritage and pioneering spirit with a trusted, local brewer such as Si’hai. We are confident that today’s agreement with Si’hai is a stride toward even greater success in China, and together we can continue to grow both of our brands through a commitment to world class brewing in the world’s largest beer market.”
As a significant regional brewer in China, the Si’hai Group is an attractive partner for Molson Coors because of its strength in Hebei Province and proven ability to build a cost effective and profitable business in an intensely competitive environment. The Si’hai brands will initially be marketed regionally and will enable the partnership to better compete across distribution channels and price segments.
“The Si’hai Group has built a reputation for high standards in brewing and an unwavering dedication to our consumers, which we expect will only be enhanced through this joint venture with Molson Coors. Si’hai’s deep understanding of the local market, combined with Molson Coors’ global brand expertise and innovation, is the formula for a very successful partnership,” said Wang Si’hai, president, Si’hai Brewing Company.
Molson Coors expects the new joint venture to be accretive and anticipates closing the transaction, which is subject to certain closing conditions, by the end of the second quarter.
About Molson Coors Brewing Company
Molson Coors Brewing Company is a leading global brewer delivering extraordinary brands that delight the world’s beer drinkers. It brews, markets and sells a portfolio of leading premium brands such as Coors Light, Molson Canadian, Carling, Blue Moon, and Keystone Light across North America, Europe and Asia. It operates in Canada through Molson Coors Canada; in the US through MillerCoors; and in the U.K. and Ireland through Molson Coors UK.
About Hebei Si’hai Beer Company Ltd.
Hebei Si’hai Beer Company was founded in 2003, located in Chengde city (around 200 kilometers from Beijing). By applying advanced brewing equipment imported from Germany, it brews, markets and sells a full portfolio of high quality beer brands, including Seahi Beer and 20 other beer brands. Its advanced equipment, brewing techniques and high product quality help Si’hai Beer Company achieve its leading position in Chengde and the Hebei area.
