Scottish & Newcastle is attempting to break into China. The brewing group is reported to have signed an agreement to buy a 19.51% stake in China's Chongqing brewery for RMB525m (US$63m).

Chongqing Brewery (Group) Ltd, the brewery's parent company will maintain its majority holding despite selling the shares to S&N. It will still hold a 34.55% stake.

The deal comes after 10 years of negotiations between the two companies. The agreement is still subject to approval by the state-owned Assets Supervision and Administration Commission and the Ministry of Commerce.

Chongqing is China's eighth largest brewer and has seen revenues rise by 27% to RMB395m in the first half of 2003 compared to the same period last year.