China Resources Enterprise and Tsingtao Brewery were among potential suitors eyeing bids for the brewery operations of Kingway Brewery. “Many mainland brewers are interested in the assets, including CR Snow, Tsingtao, Beijing Yanjing Brewery and Guangzhou Zhujiang Brewery,” a source close to the company said, adding that nothing had been finalized yet. Kingway said last month that it planned to invite beer producers to submit proposals and indicative offers for the possible acquisition of some of its brewery business and assets, as the company reviewed its strategy in uncertain economic conditions. CR Snow, the largest Chinese brewer, is a joint venture between China Resources and SABMiller. Kingway was previously jointly controlled by Asia Pacific Breweries, a unit of Singapore food and property conglomerate Fraser and Neave, and Heineken. The world’s largest brewer Anheuser-Busch InBev had also expressed interest in buying the assets, Dow Jones reported.

Shanghai Pharmaceuticals, one of China’s biggest drug makers and distributors, is buying Changzhou Kony Pharma to broaden its product portfolio and strengthen the manufacturing of special active pharmaceutical ingredients (APIs). The state-owned company said it would pay CNY300 million. Shanghai Pharmaceuticals said that this year it would step up mergers and acquisitions (M&As), using proceeds from its H-share listing last May. The company bought a 51% stake in Jinhe Bio-Technology last month. Shanghai Pharmaceuticals will buy a 70% stake in Kony Pharma and acquire the remaining 30% in the next two years. “We will also continue to seek M&A deals which facilitate our development and accelerate our moves to develop nationwide presence,” said Chairman Lu Mingfang. Based in Jiangsu province, Kony Pharma is a drug manufacturer specializing in APIs, with a focus on nucleoside antivirus APIs and losartan antihypertensive APIs, used in heart and vein medications. Shanghai Pharmaceuticals, which now makes more than 400 products, said the growth in generic drugs would rapidly boost the demand for special APIs and present a great opportunity for specialist API companies. Kony Pharma exports 50% of its products, and is preparing to pass the European Union’s CEP and the United States’ FDA certification. Kony Pharma’s revenue from special APIs was CNY63 million in the first half of 2011, with a net profit of CNY17.25 million. The revenue for 2011 is expected to reach CNY115 million, the South China Morning Post reports.

Venture capital firms invested 50% more in Chinese companies last year although the second half of 2011 saw a slowdown in growth. Their investment jumped to USD8.95 billion in 2011, research firm China Venture said. Venture capitalists invested in 976 firms last year, 15.9% more than a year earlier. The number of cases and investment value in the fourth quarter fell 43% and 39% from the second quarter. A China Venture report cautioned that investment by venture capitalists may fall slightly this year due to global economic weakness. Last year, the average size of a single investment was USD9.17 million, a 30% jump from 2010. Internet companies made up 8 of the top 10 biggest venture capital investments.

Yum! Brands will complete its takeover and privatization of Little Sheep Group this week after getting the go-ahead to withdraw the Chinese hotpot chain’s shares from Hong Kong’s main board. The withdrawal of the listing with take effect from 4 p.m. on February 2. The buyout deal was also sanctioned by the Grand Court of the Cayman Islands, where Little Sheep is incorporated. Little Sheep had 192 directly owned and 277 franchised restaurants as of June last year.

Hony Capital, the private equity arm of Legend, plans to take “more than 10” companies public this year after raising USD4.1 billion to become the largest domestic private equity fund in China. John Zhao, the founder and Chief Executive of Hony, said the fund preferred to list most of the companies in Shanghai and Hong Kong, although Nasdaq remained an option for high-technology firms. Market enthusiasm for Chinese companies deteriorated last year after scandals with some smaller Chinese firms shook Wall Street’s confidence in China’s businesses. Hony preferred long-term investments of three to five years, Zhao said. The company has invested in more than 70 firms since its establishment in 2003 and still owns stakes in more than 60 of them. “When we choose partners, we never just provide money. We always ask, ‘What is your dream, what do you lack in realizing that dream,’ and then we check if we have the ability to fill that gap,” he said. The fund already successfully helped several state-owned enterprises restructure, including Changsha-based Zoomlion Heavy Industry Science and Technology, one of the largest construction machinery manufacturers in China. In the future, the fund would invest about half of its money in state enterprises, with the rest in medium to large-sized private firms, Zhao said. This year the company’s top picks include sectors such as infrastructure, consumer products, green energy and technology. Last month’s fund raising marked the fifth time Hony raised money for its U.S. dollar fund. It attracted USD2.37 billion. It was also the second time it raised money for its yuan fund, which attracted CNY10 billion. There are roughly 3,500 private equity funds in China, a majority being domestic, according to David Brown of PricewaterhouseCoopers (PwC).