AB-InBev on shortlist for Kingway Brewery deal: sources

The deal value could be as high as $700 million and the short-listed bidders are expected to conduct due-diligence over the next two months, one of the sources said.

China Resources Enterprise Ltd <0291.HK>, which owns Snow beer brand, and Beijing Yanjing Brewery Co Ltd <000729.SZ> are among the other companies that have advanced to the next round, sources said.

Kingway Brewery has invited bids for equity stakes in six breweries, all beer and beer-related trade marks, domestic and overseas distribution networks, two sources familiar with the matter said. The company plans to retain two of its production facilities, one of the sources said.

Kingway, with a market value of about $655 million, does not plan to sell an equity stake in the company. The eventual winner can benefit from strong growth in China's beer consumption.

China's beer demand hit 450 million hectolitres in 2010, nearly twice that of the United States, and is expected to grow 5 percent per year in coming years, double the 2.5 percent growth forecast for the global market for 2011.

Anheuser-Busch and China Resources declined comment, while Kingway and Yanjing officials were not immediately available for comment. Sources declined to be identified as the discussions were private.

(Additional reporting by Philip Blenkinsop in LUXEMBOURG, David Jones in LONDON in; Reporting by Denny Thomas and Donny Kwok; Editing by Jacqueline Wong)