India: Heineken may have to merge Asia Pacific Breweries with Mallya's United Breweries

Heineken is set to inherit the 37.5% stake held by S&N in Vijay Mallya-led United Breweries (UB), but UB has now indicated that Heineken cannot be part of UB and rival Asia Pacific Breweries (APB), Economic Times published February 12.

APB, which makes Cannon and Arlem from two breweries in Aurangabad and Hyderabad, plans to bring its Tiger brand of beer to India before summer.

Heineken owns 42% in APB in India while Singapore realty major Fraser & Neave holds 38%. CK Jaipuria and Vijay Chougule are also two local minority partners in APB here. Heineken could consider merging APB with UB to avoid a conflict of interest — however, it could be a complicated affair, considering APB is listed on the Singapore Stock Exchange. Interestingly, APB’s operational head Ravi Kaza has put in his papers even as its independent future in India comes under cloud.

UB and Heineken are scheduled to start negotiations to define their future ties. “We have already indicated to Heineken that they cannot be part of competing structures in India. We have not taken it up officially as yet,” a top UB official told ET. The source said that efforts are on to arrive at a mutually agreeable business relationship.

13 February, 2008