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Dec. 21 (NBD) -- Tsingtao Brewery Co., Ltd made an announcement on Wednesday that Japanese brewer Asahi Group Holdings, the second largest shareholder of Tsingtao Brewery, will sell its entire 19.99 percent stake to Fosun International Limited and others for about HK$7.34 billion (940.1 million U.S. dollars).

The deal singled the termination of 7-year cooperation between the two beer makers.

According to the announcement, Fosun will acquire 243 million shares (about a 17.99 percent stake) from Asahi for HK$ 6.6 billion (845.3 million U.S. dollars) replacing Asahi to be the second biggest shareholder of the Chinese brewery company.

The sales price is HK$27.22 (3.5 U.S. dollars) a share. 

The remaining 1.99 percent stake will be purchased by Tsingtao Brewery Group and its subsidiary for HK$735 million (94.1 million U.S. dollars).

It is noted that when Asahi made its decision to cooperate with Tsingtao, the Japanese brewer expected to boost its beer products sales through leveraging Tsingtao's sales channels and also to help Tsingtao with the expansion into the Southeast Asian market.

However, in 2014, China's beer production saw a negative growth for the first time, followed by a downturn in Chinese beer market for almost two years. 

Asahi's selling its all stakes in Tsingtao Asahi came after its acquisition of 8 European beer brands since last year. This leads to speculation that Asahi intends to withdraw from Chinese market. 

In answer to such remark, Asahi said in an interview that the company is planning to launch high-end products in Chinese market.

By contrast, Tsingtao's new shareholder is optimistic about its new investment. Guo Guangchang, founder of Fosun International, noted that the company will share the experience in optimizing the management incentive mechanism, support Tsingtao beer's quality strategy and utilize Fosun's sports and entertainment resources in the marketing process, so as to enhance the expansion of Tsingtao beer.

This is not the first time for Fosun to make investment in the beverage industry, Zhu Danpeng, a researcher at the China Brand Research Institute specializing in the food and beverage business, told NBD.

The new deal will help the company to extend its industrial chain, Zhu added.

Email: zhanglingxiao@nbd.com.cn