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India: Shareholders of India's United Breweries (UB), owners of the country's biggest beer brand, approved plans to sell an up to 37.5% stake in the company to Britain's largest beermaker Scottish and Newcastle, Agence France-Presses reported on January 20. Vijay Mallya, head of the UB Group, which has interests ranging from liquor to construction and aviation, told reporters the transaction would "unlock the shareholder value."
Scottish and Newcastle has said it will invest up to 171 million dollars cash in the transaction which includes 54 million dollars in redeemable UB preference shares. The purchase is another move by the British brewer to tap markets expanding more swiftly than in western Europe. It has said it will give it access to all key beer markets in India and a powerful brand portfolio including the Kingfisher brand which has a 33 percent share of its domestic market.
Mallya also said his group hoped to acquire the spirits division of leading rival Shaw Wallace. He told reporters officials overseeing the bidding process had told him that UB's bid "was the highest."
Legal complications over the sale surfaced last week when the mother of the late Manu Chabria, who headed Shaw Wallace, disputed it and threatened to take it to the courts. "I don't want to comment on the family dispute. But we've approached this (purchase) in a professional manner. There is a lot of synergy in buying it," Mallya said. "The ball is now in the seller's court and it's up to them to decide the next step. If the transaction is completed we will consolidate our business," he said. Mallya declined to say how much UB had offered but Indian media reports said the bid was 12 billion rupees (261 million dollars).
Shaw Wallace sold 15 million cases of spirits during the last fiscal year to March 2004, the second largest amount after UB Group which sold 35 million.
22 January, 2005
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