The international brewing group, SABMiller, has announced that it has acquired a 29.6% stake in the Chinese brewer, Harbin Brewery Group, from China Enterprise Development Fund (CEDF), formerly the brewer's largest shareholder, for HK$675m (US$87m) in cash.

It was also announced that SABMiller and Harbin will sign a Strategic Investor Agreement (SIA) which will see SABMiller appoint at least two directors to the 11-member Harbin board. The agreement will also form a basis for sharing best practice and the transfer of expertise.

The two companies are to explore the potential for further co-operation in a number of areas including sales, distribution and procurement.

In order to acquire the stake, SABMiller has formed a new company, Gardwell, which will acquire the CEDF participation. Some members of the Harbin management team are to acquire a 5% in Gardwell.

The deal, which the companies said remained subject to certain conditions, is expected to contribute to SABMiller's earnings in the first full year.

Harbin is the fourth largest brewer in China, registering a pre-tax profit in the year to the end of December 2002 of HK$160m (US$21m) on sales of HK$1.12 billion (US$144m).