Heineken (HEINY)  has agreed to buy the Brazilian assets of Japanese Brewer Kirin (KNBWY)  as the Dutch group seeks to compete with AB InBEV (BUD) .

The pair announced Monday that Heineken's subsidiary Bavaria SA will pay ¥77 billion ($700 million) for Brasil Kirin.

The deal will make Heineken the second largest brewer in Brazil behind AB InBev which completed its acquisition of SABMiller last year, making it the biggest brewer in the world.

Heineken stock was up 0.39% in Monday morning trading in Amsterdam to change hands at €73.91, extending the gain to 3.85% over the past three months.

Kirin shares closed 0.40% up at ¥1880.50 on Monday in Tokyo.