The brewing giant, Interbrew, has acquired a 70% stake in KK Brewery, based in China's eastern province of Zhejiang, for $42m.

Interbrew said the deal extends its local platform from Nanjing further into the Zhejiang Province and confirmed its commitment to take a leading role in the consolidation of the beer industry in China's Yangtze Delta.

“We are pleased to acquire this 70% stake in KK Brewery. All parameters of this transaction are attractive.” said Stefan Descheemaeker, Interbrew's chief strategy and business development officer. “At an EBITDA multiple of 7.5, the KK Brewery operations extend our presence in the Yangtze Delta in a natural way, close to our current operations in Nanjing. We continue to monitor the Chinese beer market and remain committed to playing a leading role in the consolidation process of the brewing industry in the country. ”

KK chairman, Xu Rom Xian, said: “We are pleased with the agreement. The combination of Interbrew’s international experience and marketing expertise with the local knowledge and channels of KK Brewery will improve our company’s competitiveness and take our company forward.”

KK has 80% of the market in Ningbo city. The company operates two breweries and one bottling line in Ningbo and on the island of Zhoushan, a popular tourist destination. It also has a brewery in Kunming in the Yunan Province, close to the Vietnamese border. Annual volumes at the company total just under 3m hls, with the standard lager, KK, and the premium beer, Zizhulin, its main brands.

The deal also includes KK Brewery’s stake in the Lion brewing unit, a joint venture with its Malaysian partner Consitrade Sdn Bhd.