The world’s largest brewer, Anheuser-Busch InBev (AB InBev) said on Wednesday that it has reached a non-binding agreement with Anadolu Efes, the leading brewer in Turkey, regarding a 50:50 merger of AB InBev’s and Anadolu Efes’ existing Russia and Ukraine businesses.

This comes AB InBev’s acquisition of a 24% stake in Anadolu Efes as part of the company’s combination with SABMiller, which completed in October last year.

AB InBev said this intended combination of operations in Russia and Ukraine would strengthen the competitive position of both AB InBev’s and Anadolu Efes’ brands in these markets, with the potential for further growth. 

The combined business’ ambitions would be to lead the Russian and Ukrainian markets, with a diverse portfolio of brands and a broader range of beers for consumers. In addition, the combination would enhance AB InBev’s existing relationship with Anadolu Efes and the value of its stake in Anadolu Efes.

Following the closing of the intended transaction, the combined business would be fully consolidated in the Anadolu Efes financial accounts. As a result, AB InBev would stop consolidating its operations in Russia and Ukraine and account for its investment resulting from this transaction under the equity method.

The name of the combined company would be AB InBev-Efes and both AB InBev and Anadolu Efes would have equal representation on the board, with Tuncay Özilhan, current chairperson of Anadolu, serving as the chair.

The transaction remains conditional on the completion of satisfactory due diligence and is subject to regulatory approvals in Russia and Ukraine.

Both AB InBev and Anadolu Efes will work towards agreeing binding transaction documents in due course and further announcements will be made as the process progresses, with the completion of the transaction anticipated to complete by the end of first half in 2018.