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Appendix 2
Competitor Activity – International Business Review: 2 October, 2018

Heineken takes on AB InBev in China with $3bn deal

Heineken is buying a US$3.1 billion 40% stake in China’s top beer maker — the country’s biggest brewery deal — as it

seeks to unseat rival AB InBev in a fiercely competitive market. The Dutch brewer will
pay HK$24.4 billion for the parent of China Resources (Beer), maker of the country’s best-
selling Snow brand. The move gives Heineken a local foothold and distribution network
in a market that’s embracing more exclusive drinks, but has proved challenging for
foreign players. It promises to

give Heineken access to its

Chinese partner’s extensive
distribution to catch up to rivals.

Heineken’s operations in the country will be combined with those
of China Resources (Beer), and the Dutch brewer will license its

brand to the Chinese partner on a long-term basis. China
Resources Beer’s parent company will acquire Heineken shares
worth about 464 million euros ($538 million). The Dutch company
will make its global distribution channels available to China

Resources’ brands, including Snow.

Heineken and AB InBev are locked in battle in other emerging markets like Brazil, where the Dutch brewer’s attempt to
challenge the Belgium-based leader has squeezed overall margins and led to a slide in its stock price. The same battle has
ensued in Africa, specifically –in Nigeria, where Heineken has taken advantage of an apparent lack of focus on the part of
SAB Miller and AB InBev executives, during their ground breaking negotiations, to head hunt its key personnel (Brewery
Process Engineers & Sales Representatives) and seize market share!

Diageo inks distribution agreement with AB InBev in China
AB InBev will be the exclusive seller of Diageo Plc's Guinness brand of beer in China. The distribution agreement between

the two alcohol giants will span five years, subject to certain unspecified performance standards. Financial details of the
deal were not disclosed. The move is expected to help UK-based Diageo strengthen the presence of the Guinness brand
in China's fast-growing liquor market through AB InBev's strong distribution network in the country. The companies expect
sales of Guinness to double to 2m litres by next year. The agreement covers sales of the Guinness-branded black beer in
bars and restaurants as well as in hypermarkets, convenience stores and other retail outlets.

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