COPENHAGEN/SHANGHAI (Reuters) - Danish brewer Carlsberg (CARLb.CO) upped its stake in China's Chongqing Brewery (600132.SS) to 60 percent, strengthening its foothold in the world's largest beer market by volume, and hopes to increase its holding further, the Chinese company said.
Asia has become the main battleground for the top four global brewers - Carlsberg, AB InBev (ABI.BR), SABMiller SAB.L and Heineken (HEIN.AS) - which need the growing middle classes in emerging markets to compensate for sluggish sales in Europe and the United States.
"It was essential for Carlsberg to get the majority stake. It makes it possible to implement its business strategies and increase profitability," Sydbank analyst Morten Imsgard said.
As majority shareholder it will be easier for Carlsberg to implement efficiency programs to increase profitability, and integrate the business with its existing breweries in China.
Carlsberg, which inherited a stake in Chongqing Brewery through its takeover of British brewer Scottish & Newcastle in 2007, raised it in 2010 to become the biggest shareholder in the Chinese company with 29.7 percent.
On Thursday it completed its purchase of an additional 30.3 percent for 2.9 billion yuan ($476 million).
"With this purchase agreement Carlsberg is taking a step towards strengthening its strategic investment in Chongqing Brewery, based upon its positive outlook for the Chinese beer market," Chongqing Brewery said in a statement sent to the Shanghai Stock Exchange.
"Carlsberg hopes to continue increasing its stake in Chongqing Brewery, and hopes this deal will deepen mutual cooperation between the two firms, lifting the value of Chongqing Brewery and the investment returns to the stockholders," the statement added.
The Chinese beer market is estimated to be worth around 451 billion yuan ($74 billion) in 2013 with a volume of 53 billion liters, analysis agency Euromonitor said.
Carlsberg was the sixth-largest brewer in China in 2012 with a market share of 2.6 percent, Euromonitor said. Chongqing Brewery had a market share of 2.3 percent. Carlsberg has its strongholds in central and western parts of China.
Carlsberg declined to comment until all the purchased shares are in its deposit, it has paid for them and the deal is finally closed, a process that could take about a week.
Carlsberg first launched its takeover offer in March, when Chief Executive Jorgen Buhl Rasmussen called the purchase "an important step forward in China", and was given the green light for the deal at the end of October.
Carlsberg's main owner, the Carlsberg Foundation, said in October that it wanted to drop a rule in its charter that it must own at least 25 percent of the brewer. That could open the door for a share issue and further acquisitions in Asia.
Sydbank's Imsgard said however it would be difficult for Carlsberg to grab other large acquisition targets in China ahead of other competitors which have more financial muscle.
CR Snow, a joint venture between SABMiller and China Resources Enterprise (0291.HK), is the largest brewer in China followed by Tsingtao Brewery (600600.SS), Beijing Yanjing Brewery (000729.SZ) and Anheuser-Busch InBev.
Shares in Carlsberg fell 0.3 percent on Thursday, while the Danish benchmark index fell 0.1 percent. ($1 = 6.0913 Chinese yuan)
Editing by Sophie Walker and Anthony Barker