Compania Cervecerias Unidas will create a joint venture with local food and juice producer Watt's.

The two companies confirmed last week that CCU will buy a 50% stake in Watt's for US$28.3m. The Chilean drinks maker and brewer will subsequently see its domestic product portfolio and liquid food and soft drink market shares rise.

The purchase will see CCU and Watt's, who have worked together for the past 27 years through their Ecusa venture, create a company called Promark, which will own Watt's Icefrut, Yogu Yogu and Shake to Shake trademarks. Promark will give exclusive sales and marketing licences for the brands to Watt's and Ecusa.

"This is an historic agreement that seals a commercial relationship successfully initiated in 1979 when Watt's granted a license of its trademarks to CCU for some formats and flavours," said Rodolfo Véliz, Watt's general manager.

Patricio Jottar, the general manager of CCU, added: "With this association we are taking a step forward in our relation with Watt's. This will allow us to consolidate and grow our leadership in a market where consumers demand products for a healthy lifestyle."

Jointly owned by Chilean industrial and financial group Quinenco and Dutch brewer Heineken, CCU is the biggest brewer in Chile and second biggest brewer in Argentina.

In August last year, the company posted a 13.6% leap in first-half profits on the back of a slight increase in sales. Net profit for the first six months of 2006 reached CLP23.9bn (US$44.2m) while sales rose to CLP 251.4bn from CLP233.8bn.