South Africa's SABMiller, which owns a 20 percent stake in Chinese beer maker Harbin, a regional beer-maker, launched a takeover bid. SABMiller planned on merging Harbin with a local brewer. London-based beer-maker SABMiller, the world's second largest brewer in volume, withdrew from the tender process after A-B reached an agreement with Harbin.

Harbin management was already upset with SABMIller for letting its other local partner launch a price war on their home turf. But with help from Harbin's executives, archrival Anheuser-Busch, the world's largest brewer, outbid SABMiller to increase its market leading share.

Reports are mixed, but Anheuser-Busch is reportedly paying $688 to $720 million for Harbin Brewery. The Group ranked as one of the top five brewery groups in china in 2001, in terms of production volume. Harbin also completed its acquisition of GD Brewery Northern (Holdings) in 2001, taking the Groups production capacity to more than 1 million tons. Over a century ago the original Group was founded by a Russian businessman, Ulubulevskij. The brewery was first in China, named Ulubulevskij Brewery, with annual production of 300 tons.

Beer is the beverage choice for the growing middle class of Chinese that downed $6 billion of the suds last year, and is expected to grow 6 percent a year for the near future, way above the 1 percent growth in the US market.

Anheuser-Busch also holds a 9.9 percent share in Tsingtao Brewery Co., which plans to increase to 27 percent over the next several years.

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