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(Sharecast News) - Sapporo Breweries on Monday said it was was forming a strategic partnership with Danish brewing giant Carlsberg across Southeast Asia and Hong Kong, investing about $643m for a 25% stake.
The Japanese firm said the beer market in the region was projected to grow at an annual rate of around 5%, noting Carlsberg had a "strong market presence across the region". The Danish company will hold the remaining 75% of the venture.
"Through this alliance, Sapporo aims to expand sales volume of its "Sapporo Premium Beer" in the target markets to approximately 10 times the 2025 level by 2035," the company said in a statement.
Under the deal, Sapporo will grant the joint venture a long-term licence for Sapporo Premium Beer and expects to benefit from diversified revenue streams including dividends, royalty income and manufacturing-related earnings.
It added that it expected the investment to generate returns exceeding a 12% hurdle rate established for the relevant markets.
The two firms said they would build on the collaboration for the sale of Sapporo Premium Beer in Malaysia, Hong Kong and Singapore since 2024, expanding the partnership to additional markets including Laos, Vietnam and Cambodia.
Sapporo will also grant a long-term brand license to the joint venture for Sapporo Premium Beer.
"Through this investment, Sapporo expects to benefit from diversified revenue streams, including dividends, brand royalties, and manufacturing-related earnings. In addition, the two companies have entered into a long-term brand license agreement in the United Kingdom for Sapporo Premium Beer and have agreed to include Myanmar as a market for brand licensing," they added.
"Going forward, the companies will jointly explore opportunities to introduce the brand in other markets in Asia and Europe."
Reporting by Frank Prenesti for Sharecast.com
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