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Drinks giants Heineken and Diageo are set to work together with Namibia Breweries in South Africa to promote their beer, cider and ready-to-drink businesses.

The companies announced two projects and said Heineken's total net investment will be €260 million (£199 million), while Diageo will invest €100 million (£76 million).

London-based Diageo markets alcoholic drinks brands including Smirnoff, Johnnie Walker and Guinness, while Heineken, headquartered in Amsterdam, produces beers such as Heineken and Amstel.

The new joint venture builds on brandhouse Beverages, the companies' current cost-sharing joint venture in the country, which will continue to market and distribute the parties' products in South Africa.

Heineken and Diageo will each own 42.25 per cent of the new joint venture while Namibia Breweries will own 15.5 per cent. The agreement is subject to regulatory clearance, expected at the end of March.

In addition, Heineken and Diageo are constructing and operating a brewery in Gauteng province, South Africa, which will be owned 75 per cent by Heineken with Diageo holding a 25 per cent stake.

The brewery will have an initial capacity of three million hectolitres and will produce Heineken and Amstel brands, among others.

Tom de Man, Heineken's regional president Africa and the Middle East, said: "With Africa now Heineken's fastest growing region, with the Heineken brand growing 70 per cent in South Africa and Amstel very clearly still a favourite with South African consumers, there is no better time to invest in growth."

Construction is hoped to commence within three months and the companies expect the brewery to be operational by the end of 2009.