UPDATE 2-China's Fosun takes stake in Tsingtao Brewery as Asahi exits

* Fosun and units acquiring 18 pct stake in Tsingtao for $844 mln

* Fosun to become second largest shareholder in Tsingtao

* Deal marks Asahi's latest divestment from China's beer market (Adds Fosun chairman quote, background)

TOKYO/HONG KONG, Dec 20 (Reuters) - Japanese brewer Asahi Group Holdings said on Wednesday it would sell its entire 19.9 percent stake in China's Tsingtao Brewery Co , partly to Chinese conglomerate Fosun International and partly to Tsingtao itself, for a total of 106 billion yen ($937 million).

Asahi said in October it was considering a sale, its latest divestment from China's beer market as it seeks to expand its business in Europe and other Asian markets.

China is the world's largest beer market by sales, but profits have been harder to come by amid fierce competition between local brewers and global beer giants AB InBev, Heineken NV and Carlsberg.

Asahi has agreed to sell most of its stake - about 243 million shares, equivalent to a 17.99 percent stake - to Fosun and its subsidiaries for HK$6.6 billion ($844 million), Asahi and Fosun said in separate statements. The remainder, around 27 million shares, will be sold to Tsingtao for HK$735 million, Asahi said.

The sale price of HK$27.22 per share was at a 32 percent discount to Tsingtao's last closing price in Hong Kong on Wednesday, and the transaction is expected to close in the first quarter of 2018, Fosun said.

Asahi's decision to divest its stake in Tsingtao, which it acquired in 2009 for around $666 million, follows its announcement in June to sell its 20 percent stake in China's Tingyi-Asahi Beverages Holding Co Ltd for $612 million.

The maker of Japan's best-selling beer, Asahi Super Dry, has been increasingly focusing on Europe, and bought a group of eastern European beer brands from Anheuser-Busch InBev late last year for 7.3 billion euros ($8.7 bln).

Its exit from Tsingtao will make Fosun the second largest shareholder in Tsingtao, after state-owned Tsingtao Brewery Group. It comes as a handful of Chinese conglomerates including Fosun have turned their sights back to the home market amid Beijing's crackdown on showy overseas ventures.

"By partnering Tsingtao's brand and product mix with Fosun ... we are confident of Tsingtao's future prospects. In its pursuit to better serve customers by leveraging the consumption upgrade in the brewery market, Tsingtao's brand value and market share can be further enhanced," Fosun Chairman Guo Guangchang said in the company's statement.

Fosun, one of Chinas most prolific deal-makers headed by billionaire Guo, is best known outside the country for its portfolio firms including French resort chain Club Med, margarine maker St Hubert and Portugal's largest listed bank Millennium bcp.

Like other Chinese conglomerates such as Dalian Wanda and HNA Group, Fosun has dialed back on some ambitions abroad as Beijing has stepped up scrutiny of outbound deal-making, notably in sectors such as property, hotels and entertainment.

Fosun has since pared back its foreign real estate portfolio. It sold off a Sydney office tower for A$142.5 million ($109 million) this week and is also selling Lloyds Chambers in London.

($1 = 113.1500 yen) ($1 = 7.8234 Hong Kong dollars) ($1 = 0.8441 euros) ($1 1.3038 Australian dollars) (Reporting by Malcolm Foster in TOKYO and Julie Zhu in HONG KONG; Additional reporting by Lee Chyen Yee in SINGAPORE; Editing by Susan Fenton)