Japan's Suntory Holdings plans to dissolve its joint ventures with China's second-largest beer maker Tsingtao Brewery Co, and reallocate its resources to the wine market amid a slowing Chinese economy, the Japanese company said on Monday.
Suntory will sell its entire 50 percent stakes in two joint ventures in production and sales to Tsingtao by next June. The deal is worth nearly 823 billion yuan ($130 billion), according a Tsingtao's filing to the Hong Kong stock exchange.
The Japanese beverage group, however, planned to continue selling its popular Suntory beer in Shanghai through Tsingtao even after the joint venture was dissolved while it focused its business on the wine and whisky market in China, it said.
The joint ventures, formed in 2012, generate annual sales of about 40 billion yen ($335 million), according to Japan's Nikkei newspaper.
Suntory's exit comes as Japanese brewers are under pressure to step up acquisitions after the world's two largest beer makers, Anheuser-Busch InBev and SABMiller, recently struck a US$106 billion merger deal.
China's beer production fell nearly 3 percent to 49 billion liters last year, declining for the first time in 24 years, according to the National Bureau of Statistics. This was due to a cooling economy and the government's clampdown on luxury consumption.
