(WSJ) - Anheuser-Busch InBev NV said it has agreed to sell SABMiller PLC’s Chinese beer business to China Resources Beer Holdings Co., as the Belgian brewer seeks Chinese regulatory approval for its pending acquisition of its biggest rival.

China’s government-controlled brewer has agreed to acquire SABMiller’s 49% interest in the joint venture known as CR Snow in a $1.6 billion deal that would give it full ownership over Snow, the world’s No. 1-selling beer by volume. China Resources and SABMiller have been partners in the joint venture since 1994.

The deal is subject to regulatory approval and contingent upon AB InBev closing its roughly $108 billion acquisition of SABMiller. The Belgian brewer said it expects to do that in the second half of this year.

AB InBev had been expected to arrange for the sale of SABMiller’s stake in Snow since announcing last year its roughly $108 billion takeover of SABMiller, but people familiar with the company’s plan in January said it would try to keep the stake and maintain operational control over the company. Ultimately, it decided to sell rather than keep Snow because holding on to the business could have slowed the regulatory approval process, said a person familiar with the company’s strategy.

If approved, the deal would enable AB InBev to focus on higher-priced brands and to build a strategy to boost profit margins in China, where competition is stiff and prices are low. The country is the world’s largest beer market by volume and has been the main driver of growth for global beer consumption in the last decade, accounting for more than half of the beer industry’s total volume increase.

For China Resources, the deal would propel China further in its ambitions to enter the global market and cap a string of recent Chinese acquisitions. In February, China’s state-owned China National Chemical Corp offered $43 billion in cash to buy Swiss pesticide and seed company Syngenta AG, marking the most ambitious foreign takeover attempt by a Chinese company to date. General Electric Co. agreed to sell its appliance unit to Chinese manufacturer Haier Group for $5.4 billion in January.