[HONG KONG] Tsingtao Brewery Co Ltd said on Monday it would buy the equity interest it did not already own in a loss-making brewery joint venture with Japan's Suntory Holdings, hoping to boost efficiency.
China's best-known beer brand said it would buy the 50 per cent equity interest in the venture, which includes Suntory Tsingtao Brewery (Shanghai) Co Ltd and Tsingtao Brewery Suntory (Shanghai) Sales Co Ltd, from Suntory for 822.9 million yuan (US$129.5 million).
The Chinese group will enter into a separate agreement regarding the rights to use Suntory's trademarks for a licence term agreed by the parties, Tsingtao said in a filing to the Hong Kong bourse.
The joint venture's sales have stalled amid stiff competition in the Chinese market, people familiar with the matter said on Friday.
Scrapping the joint venture highlights the difficulties Japanese brewers face in the global beer market, which is set to be dominated by a planned merger of the two-biggest players, Anheuser-Busch InBev and SABMiller.
The deal is subject to the approval from the Ministry of Commerce in China, Tsingtao said. Trading in the company's shares in Hong Kong, suspended on Friday afternoon, will resume on Monday.