The UK brewer Scottish & Newcastle (S&N) today said it has signed a binding legal documentation with Chongqing Breweries (CBG) in China.

S&N will purchase a 19.5% stake in the CBG owned Chongqing Brewery Company Ltd, at a price of Rmb 525m (£35m) in cash.

"This equity investment will be used to further develop Chongqing Breweries, which currently ranks sixth in China and operates 18 breweries, primarily in the South West region," the company said in a statement.

Completion of the transaction is expected in a few months and is dependent on the necessary Chinese government approvals.