Interbrew has announced today that it has strengthened its ties with the Zhujiang Brewery of Guangdong, China, by signing a Framework Agreement, building on a Memorandum of Understanding signed in Shanghai in March.

Under the Framework Agreement, Interbrew will initially subscribe to 24% of the shares in Zhujiang, with the intention to further increase its stake within the framework of Chinese legislation.

"Interbrew is confirmed as Zhujiang's strategic partner and will bring its expertise in the brewing sector, as well as actively participate in the management of Zhujiang Brewer," the Belgian brewer said in a statement.

Interbrew will also act as one of the promoters for the transformation of Zhujiang into a Joint Stock Company, which is expected to occur by the end of September. This is a first step in the process of Zhujiang's initial public offering, which is scheduled for 2003.

"We are pleased to move one step closer to strengthening our longstanding partnership with Zhujiang Brewery. We expect to communicate full details of this transaction by September, when we will have finalized negotiations." said Hugo Powell, chief executive officer of Interbrew, at the signing ceremony. "It will allow us to create value by extending our platform in the most promising beer market in the world".

Zhujiang's beers are available in more than 30 provinces or autonomous regions in China.  With a market share of 50% in the Guangdong Province and above 80% in Guangzhou, the Zhujiang Brewery is the most profitable brewer by hectoliter sold in China. Its sales volume in 2001 amounted to 7.5 million hectoliters. Its leading brand is Zhujiang Beer.