Harbin Brewery suing SABMiller

Harbin Brewery Group is suing SABMiller in the UK. The Chinese brewer alleges that SABMiller agreed to pay it US$55 million in a strategic partnership agreement between the two firms which was broken off earlier this year during the bidding war between UK-based SABMiller and US-based Anheuser-Busch. In June 2003 SABMiller formed joint venture firm Gardwell, taking a 95% share, with Advent, a firm owned by six Harbin Brewery directors, taking the remaining 5%. Gardwell then purchased a 29.6% share in Harbin Brewery for US$641 million. Advent had an option to sell its Harbin Brewery stake to SABMiller for US$55 million after three years. But if SABMiller made a general offer for Harbin Brewery or pulled out entirely, the exercise date of the option would be accelerated and the price doubled. SABMiller also granted a US$55 million loan to Advent's owners with the caveat that SABMiller would claim Advent's Gardwell stake if the loan went into default. After the Harbin takeover bid began, SABMiller declared the loan in default and claimed the 5% share.