Interbrew has closed its acquisition of China's K.K. Brewery. The Belgian brewer paid US$35m cash for a 70% stake of the brewing operations of the Chinese K.K. Group.

The K.K. Brewery, located in the city of Ningbo (the second largest harbour of china, after Shanghai), is the leading brewer in the Province of Zhejiang. Interbrew said the transaction reinforced its commitment to play a leading role in the consolidation of the beer market in China's Yangtze Delta region.

The transaction corresponds to a 7.2x EBITDA multiple.

K.K. Brewery operates two breweries and a bottling line in the Yangtze Delta. The 2002 volume of K.K. Brewery was 2.5 million hl. Its main brands are K (King beer) and Zizhulin, the leading standard lagers, and K.K. and one week, the premium brands.

During the closing period Interbrew sold the operations of the K.K. Brewery in Kunming in the Yunnan Province (close to Vietnam), because they did not fit in with Interbrew's strategy for China.

"Interbrew seeks to be a leading player in the consolidation of the beer market in the prosperous coastal region of China. In this region we are creating a strong local platform in which to further grow our Chinese brands." said John F. Brock, CEO of Interbrew. "The K.K. brands will considerably strengthen our Chinese platform and enhance the product offering to our consumers."