Despite speculation that it would be sold to a foreign bidder, Jianlibao, one of China's largest beverage companies, has sold the majority of its shares to a Chinese investment group, the Zhejiang International Trust and Investment Company.

Zhejiang will pay 338m yuan (US$40.9m) for a 75% stake in Jianlibao, currently owned by the Guangdong Province's Sanshui municipal government, and will also take on debts worth 1.5 billion yuan (US$181.3m).

The announcement comes as something of a surprise as the Sanshui government was thought to favour a foreign takeover with Danone and Singapore's Tee Yih Jia Food Manufacturing Pte Ltd among the front-runners.

The high level of debt is thought to have deterred foreign investors. Zhejiang International said it plans a stock market flotation for Jianlibao in due course and significant investment in research and development and new products.

Having been a major player in the Chinese market in the 1980s, Jianlibao's market share of China's soft drinks sector has declined to around 5%.