Lion Nathan Ltd, Australasia's second-largest brewer, is to sell its China beer business to China Resources Snow Breweries (CRSB) for US$154 million, the two companies announced yesterday.

CRSB, a joint venture between China Resources Enterprises and world beer giant SABMiller, will pay US$71 million in cash and assume US$83 million debts of Lion Nathan, according to their agreement.

"This is an excellent outcome for Lion Nathan and its shareholders," said the Australasian firm's CEO Gordon Cairns.

Analysts said that Lion Nathan's quitting the Chinese market is due to its huge losses in the highly competitive sector.

Earlier reports said that during the past nine years, the company suffered a total loss of over A$200 million(US$140 million).

Lion Nathan, which entered China in 1995, had three brewing plants in Suzhou, Changzhou and Wuxi in Jiangsu Province, with major brands Steinlager, Taihushui, Carbine, Rheineck and Beck's.

"The acquiring of Lion Nathan China, which has a total production capacity of 516,000 kilolitres, is an important step for CRSB's business expansion in eastern areas and its national business integration," said Frank Ning, chairman of China Resources Enterprises.

Through mergers and acquisitions, CRSB now owns 36 breweries nationwide, with a total production capacity of 5.6 million kilolitres.

It plans to build a brewing factory producing 300,000 kilolitres annually in Dongguan, with a total investment of 680 million yuan (US$82 million).

(China Daily 09/16/2004 page10)