Harbin of gloom: Chinese chiefs sue SABMiller for £3.9m

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The Independent Online

Brewing giant SABMiller is being sued for HK$55m (£3.9m) by six directors at the Chinese rival that it failed to buy.

Brewing giant SABMiller is being sued for HK$55m (£3.9m) by six directors at the Chinese rival that it failed to buy.

SABMiller lost out on acquiring Harbin Brewery when its larger American rival, Budweiser owner Anheuser-Busch, won the race for control.

But Harbin's six-strong management team claim SABMiller still owes them money, despite the London-listed group missing out.

SABMiller first became involved in Harbin in June 2003, when it bought a 29 per cent stake with the ultimate intention of taking over the whole business. As part of the deal, two tranches of share options in Harbin, each worth HK$55m, were granted to the directors. The first tranche was paid earlier this year. After this, however, Harbin switched allegiances and agreed to be taken over by Anheuser-Busch.

SABMiller is claiming that, under the original contract drawn up between the two brewers, this meant it no longer had to pay the final tranche of options. It has gone to the High Court in London to have this confirmed.

The Harbin managers, however, have counter-sued for the remaining money and are seeking to have the case switched to Hong Kong.

The case is now expected to continue into 2005, but despite the relatively small sums involved, SABMiller - which has a market value of £6.7bn - is refusing to back down.

Said a spokesman: "We think that we have got an exceptionally strong case."

Anheuser-Busch holds 38.17 per cent of Harbin, China's oldest and fourth-largest brewer, and is paying to take control of the part of the business it does not already own.

The deal, worth HK$3.5bn, trumped SABMiller's original offer by 30 per cent. SABMiller is selling its stake to Anheuser-Busch for $211m (£116m).

China's booming beer market is expected to expand as much as 5 per cent a year until 2008.

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