Heineken, the world's second-largest brewer, has struck a deal to expand in China, the world's biggest beer market.
Heineken said Friday it is buying a 40 per cent stake in the company that controls China's biggest beer maker, China Resources Beer. It will invest US$3.1 billion ($4.5b) for the stake and set up a venture.
It says that Chinese drinkers are embracing imported beers and that CRB, a state-controlled company that produces the best-selling Snow lager, lacks a premium overseas brand.
The stake in CRB would significantly boost Heineken's distribution reach.
Heineken is trying to keep pace with Anheuser-Busch InBev, which is the world's largest brewing company and in 2016 added to its heft by taking over its closest rival, SABMiller. AB InBev is worth €174b ($298.8b), multiple times Heineken's €51b.
Big brewers in the US and Europe are looking for new customers in developing markets, where growth in demand is stronger and there is often less competition from craft brewers.