South African brewing company, SABMiller (SABM) has acquired a 29.6 per cent stake in the Harbin Brewery Group.

The cost of the cash purchase – from the China Enterprise Development Fund (CEDF) , Harbin’s largest shareholder – is approximately $87m, and the transaction will be effected by the creation of a new SABM subsidiary, Gardwell.

Gardwell will buy the CEDF shareholding and – to ensure their continued contribution to the successful operation of the alliance – certain members of the existing Harbin management team will acquire a 5 per cent stake in it.

Under a separate Strategic Investor Agreement, the two companies will investigate possibilities for co-operation in areas such as sales, distribution and procurement.

Harbin, focused on the North-Eastern Chinese market, is China’s fourth largest brewer and was listed on the Hong Kong stock exchange in June last year.

Graham Mackay, SABM chief executive, said: "We are delighted to have made this strategic investment in Harbin. The transaction represents another step in our strategy in China of focusing on local brands to build regional leadership."

Peter Lo, chief executive of Harbin Brewery, said: "We are very pleased to be partnering with one of the world’s leading brewing groups, which has the ability to bring significant value to Harbin."

SABM has major brewing and distribution operations in America, Africa, Europe and Asia and is the world’s largest brewer by volume, with 122 breweries in 40 countries. Through its joint venture partner, China Resources Breweries, the company operates 30 breweries in nine provinces in China. Details: www.sabmiller.com