Anheuser-Busch InBev (AB InBev) has agreed to divest SABMiller’s Chinese beer business to China Resources Beer Holdings for $1.6bn, in order to secure regulatory approval approval for its pending purchase of SABMiller.

China Resources Beer Holdings is a Chinese government-controlled company and it has agreed to take over 49% stake in the joint venture, which is called CR Snow.

This deal would give the Chinese firm complete control over Snow.

Since 1994, China Resources and SABMiller had formed a joint venture.

With the acquisition, AB InBev has moved one ahead to close its £71bn acquisition of SABMiller, and the Belgian brewer expects to complete the acquisition in the second half of 2016.

In a statement, Anheuser-Busch InBev said: "This announcement represents the next step in AB InBev’s continued commitment to proactively address regulatory considerations in its recommended acquisition of SABMiller."

"The agreement with CRB is conditional on the successful closing of the recommended acquisition of SABMiller by AB InBev as announced on 11 November 2015, which itself contains certain regulatory pre-conditions and conditions."

Once the transaction is approved, AB In Bev would be able to build strategy to boost its profit margins in China.

China is said to be world’s largest beer market in terms of volume, reported The Wall Street Journal.

For China Resources Beer Holdings, the acquisition is expected to make it the largest brewer in China.

With the sale of Snow, AB InBev’s Chinese business will focus on its Budweiser and Harbin brands.