Heineken rumoured to be selling off its China business in deal worth $1bn

Heineken could be about to offload its brewing interests in China, according to reports suggesting that China Resources Beer – the Hong Kong-based investment group that owns the world’s biggest beer brand, Snow – is in talks with the Dutch brewer over a deal worth US$1 billion.

According to Reuters, the two beer giants are currently in discussions about a possible acquisition of Heineken’s brewing business in China, which could include the sales of three breweries in Guangdong, Hainan and Zhejiang provinces, as well as Heineken’s distribution operation and its brands in China.

Heineken entered the Chinese market in 1983 and sells its Heineken, Tiger and Sol in China, along with local brands Anchor and Hainan Beer, however has struggled to establish a foothold.

In its 2017 full year results, the company reported overall volume growth of 4.5%, with positive volume performance across all regions “apart from Asia Pacific”.

The brewer reported on double digit volume growth across Brazil, South Africa, Russia, Mexico and Romania and healthy growth across European markets including Italy, Spain, France and the Netherlands, which it said were enough to “offset weaker volumes in Vietnam, China and the US.”

The reports come as it was reported that Heineken could become a majority shareholder in India’s United Breweries after reportedly approaching the Indian authorities about buying the shares confiscated from the company’s former owner, Vijay Mallya.

The brewer already has effective control through a 44% shareholding in the company, but has reportedly approached the Indian authorities about buying the 15.2% tranche of shares seized by the courts from the fugitive former owner Vijay Mallya.

CR Beer meanwhile acquired SABMiller’s 49% stake in Snow for US$1.6 billion in 2016.

Neither CR Beer nor Heineken have commented on reports.