The five-month-long acquisition deal has collapsed. On October 26, Tsingtao Brewery Company Limited announced the termination of its acquisition of a 100% stake in Jimo Huangjiu Factory Co., Ltd. (hereinafter referred to as "Jimo Huangjiu"). The deal, which began on May 8, 2025, ultimately fell through due to unmet preconditions for completion, with Tsingtao Brewery not liable for any breach of contract.
Tsingtao Brewery disclosed that it had signed a Share Transfer Agreement with Xinhuajin Group Co., Ltd., Shandong Lujin Import & Export Group Co., Ltd., and Jimo Huangjiu, intending to acquire the latter’s 100% stake from Xinhuajin Group and Lujin Group. However, as of the announcement date, the preconditions for completion remained unfulfilled, leading to the termination of the transaction.
Public records show that Jimo Huangjiu was established in 1949, with the Jimo County Huangjiu Factory founded in 1980. Its "Jimo" brand Huangjiu is known for its distinctive slightly bitter and roasted aroma, as well as its rich historical and cultural heritage, making it one of China’s traditional Huangju representatives. Xinhuajin Group holds a 45.45% stake in Jimo Huangjiu, while Lujin Group owns the remaining 54.55%. In 2024, Jimo Huangjiu reported operating revenue of 166.41 million yuan, up 13.5% year-on-year, and net profit of 30.47 million yuan, a 38.0% increase.
Liquor expert Xiao Zhuqing noted that Tsingtao Brewery would have been an ideal strategic partner for Jimo Huangjiu, given its financial strength, supply chain, marketing expertise, and consumer market experience. Missing this opportunity makes it unlikely for Jimo Huangjiu to find such a well-matched collaborator in the future.
For Tsingtao Brewery, the failed acquisition means a temporary setback for its "Beer + Baijiu" diversification strategy. Company Secretary Zhang Ruixiang previously stated that acquiring Jimo Huangjiu aimed to diversify its business and create sales synergies with its beer products. This strategy was intended to offset seasonal beer market downturns and open new growth avenues.
The strategic move aligns with Tsingtao Brewery’s recent performance. In the first three quarters of 2025, the company reported revenue of 29.367 billion yuan, up 1.41% year-on-year, and net profit attributable to shareholders of 5.274 billion yuan, a 5.70% increase—reflecting modest growth.
The third quarter showed further deceleration, with revenue dropping 0.17% year-on-year to 8.876 billion yuan and net profit rising just 1.62% to 1.37 billion yuan. Jimo Huangjiu’s strong growth—13.5% revenue and 38.0% net profit increases in 2024—could have provided Tsingtao Brewery with a much-needed boost.
Moreover, the acquisition would have accelerated Tsingtao Brewery’s "Beer + Baijiu" strategy. Similar moves have been made by competitors like China Resources Beer, which acquired stakes in Jingzhi Baijiu, Jinzhongzi, and Guizhou Jinsha Distillery between 2021 and 2023.
However, the deal’s collapse is particularly critical for Jimo Huangjiu, as it not only sought a buyer but also needed funds to repay debts. On August 26, 2025, the Qingdao Securities Regulatory Bureau issued a regulatory notice revealing that Xinhuajin Group, controlled by Zhang Jianhua, had misused company funds. As of the 2025 interim report, Xinhuajin and its affiliates owed 406 million yuan in non-operational fund usage, with regulators demanding repayment within six months to avoid penalties.
Shandong Xinhuajin International Co., Ltd. stated that it had signed repayment and pledge agreements with Xinhuajin Group and Lujin Group, securing a 665 million yuan accounts receivable claim from Tsingtao Brewery as collateral.
Unfortunately, Jimo Huangjiu never received the expected funds. Instead, its shares faced multiple freezes. Qichacha data shows that since September 2025, Jimo Huangjiu has had seven equity freezes totaling over 100 million yuan, all involving Xinhuajin Group and Lujin Group due to financial loan disputes and asset preservation cases across multiple courts.
The latest freeze occurred on October 10, when the Shenzhen Futian District Court ordered a 15.75 million yuan equity freeze, effective until October 9, 2028.
The failed five-month acquisition serves as a cautionary tale for mergers and acquisitions in the liquor industry, highlighting the importance of target companies’ shareholder qualifications and equity clarity as critical prerequisites for deal completion.
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