China Resources Beer (Holding) Co Ltd (CR), China’s largest brewer is said to be in talks to acquire Heineken NV’s Chinese business as the Dutch brewer looks to exit the market.

According to Reuters which first broke the news on Thursday, the transaction could be worth more than $1 billion. Details of the talks are still ongoing and could yet fall apart.

Heineken is looking to exit the China market due to strong competition from local rivals as well as multinationals like AB InBev and Carlsberg. In 2017, Japan’s Asahi Group Holdings sold its 19.9% stake in Chinese brewer Tsingtao Brewery Co, CR’s biggest rival – for $937m as it gave up on the market and set its sights on Europe and elsewhere in Asia.

While China is the world’s largest beer market by volume, most of the volumes come from low end beers which make up 80% of the market compared with an average of 18% in big developed markets. CR dominates the low end beer segment with its Snow brand, the world’s top selling beer brand, but is almost exclusively sold in China.

Heineken’s business in China is entirely in the premium segment with its flagship Heineken brand, Tiger and Sol, and a few other low cost beers like Anchor and Hainan Lager. Even with that, the company has struggled to set-up a strong distribution network in the country and lags far behind AB InBev’s Budweiser in the premium market.

According to Euromonitor, a market research firm, Heineken only had 0.5% volume share of the China market in 2016, while China Resources held 25% of the market.

The research firm notes that beer sales volume in China has been falling since 2013, while sales of higher-margin premium beers have been growing at double-digit rate.

For CR, it stands to gain Super-Premium lager brands that it currently lacks from the number two beer company in the world. The Heineken brand sells for three times the price of CR’s Snow brand in China.

However, analysts cast doubt that Heineken would eagerly sell the Chinese rights to its flagship beer to China Resources for $1bn. Euan McLeish, an analyst at Bernstein’s said the likely scenario to play out would be a licensing agreement between the two companies, warning that Heineken would not lightly give up control of its beer’s hard-won brand value.

“Heineken tends to be very protective of their brand globally,” McLeish wrote. “Heineken would be unlikely to give it over to a third party without significant influence and the ability to take the brand back if required.”

McLeish added that Heineken brand Lager would not be the “silver bullet” for CR Snow as it currently only accounts for a 0.4% share of the China beer market. Growing that share would take a big effort that could end up damaging the brand.

“The global beer industry is littered with cautionary tales of premium brands being destroyed by pumping them out too fast across mainstream platforms,” he said. “We would expect Heineken to be very cautious about giving the brand to CR Snow’s or anyone else’s – mainstream salesforce to attack Budweiser and chase volume.”

McLeish said Heineken’s management would not want to reduce Heineken Lager’s 25% to 30% price positioning above Budweiser and undo 80 years of “patiently building super premium credentials of the brand”.