Nestle says will sell China water business to Tsingtao Brewery Group

FILE PHOTO: The exterior of a lorry's cargo compartment is pictured outside the headquarter of Nestle, the world's biggest food group, before the 2008 results news conference in Vevey February 19, 2009. REUTERS/Denis Balibouse

BEIJING (Reuters) - Nestlé SA said on Friday it had agreed to sell its China water business to Tsingtao Brewery Group 600600.SS as part of a strategic cooperation agreement with the Chinese beer maker.

The transaction comprises of the transfer of local brand “Dashan Yunnan Shan Quan” and three factories located in Kunming, Shanghai and Tianjin, Nestle said. It also said Tsingtao Brewery will produce and market the Nestle “Pure Life” brand in China as part of a licensing agreement between the companies.

The two companies did not disclose the financial details of the deal. China is the second largest market for the Nestlé Group.

Reporting by Sophie Yu and Brenda Goh; editing by David Evans