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Analysts say Tsingtao deal good for Anheuser.

Anheuser-Busch has made a canny deal with Tsingtao, according to industry analysts. A-B will raise its share of Tsingtao to 27% from the current 4.5 percent, in a debt equity deal that will allow A-B to begin converting bonds into shares in late 2003. Asian analysts said that Anheuser-Busch is not paying a high premium for its shares.

China's beer market, while still very regional in nature, has been growing at 6% a year. Tsingtao has been one of the fastest-growing Chinese breweries. The company has been on serious acquisition binge since 1997, buying 40 breweries.

Tsingtao needs the funds from A-B to modernize existing breweries and continue acquisitions. Analysts think Tsingtao may have bought too many breweries too fast, but Anheuser-Busch dollars and expertise will help Tsingtao consolidate its expansion.

Over the long term, analysts said the deal will provide enormous dividends for Anheuser. The St. Louis brewer will immediately gain higher exposure within the Chinese market, and will be able to make use of Tsingtao's extensive sales and distribution network.
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Title Annotation:Anheuser-Busch raises shares in Chinese brewery
Publication:Modern Brewery Age
Geographic Code:1USA
Date:Oct 28, 2002
Previous Article:Anheuser furthers Tsingtao alliance.
Next Article:Mad River Brewing Company.

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