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Business

Asahi to sell stake in top Chinese soft drink producer

Proceeds from $625m deal to be funneled into Europe

TOKYO -- Japanese food and beverage company Asahi Group Holdings intends to sell its stake in a Chinese joint venture to its local partner, Tingyi Holding.

The Japanese company currently holds some 20.4% of Tingyi-Asahi Beverages Holding, whose earnings are, by law, reflected on Asahi's books.

Asahi plans to transfer the stake to its partner -- China's top maker of instant noodles -- for about 70 billion yen ($625 million) next year. Proceeds from the sale are to be invested in Europe, where Asahi has already acquired the western and eastern European operations of Belgium's Anheuser-Busch InBev, the world's largest brewer.

Asahi set up the joint venture with Tingyi and others in 2004, aiming to strengthen its Chinese operations. The joint company absorbed Asahi's production and sales know-how and became China's largest soft drink producer. In the latest fiscal year, it sold $4.46 billion worth of tea, water and other products. But sales have been slowing in recent years, as competition intensifies.

Asahi also holds a stake in major Chinese food company Ting Hsin International Group, which owns Tingyi. Asahi is expected to maintain its relationship with Ting Hsin.

(Nikkei)

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