Heineken eyes controlling stake in India’s United Breweries – sources
MUMBAI, Aug 24 (Reuters) – Heineken NV is seeking to raise its stake in India’s largest brewer, United Breweries Ltd, to gain full management control as it bets on the country’s growing thirst for beer, sources with direct knowledge of the matter said.
Dutch brewer Heineken is the single-largest shareholder in United Breweries with a 42.07 percent stake. It now plans to take that holding beyond 50 percent, by buying shares from liquor baron Vijay Mallya and his group companies, the sources said.
The stake hike, a bet on one of the world’s fastest growing beer markets by the world’s third-largest brewer, will be completed in phases over the next couple of years, said the two sources, who declined to be named as the talks are private.
One of the sources told Reuters that talks to raise Heineken’s stake in United Breweries, maker of India’s best-selling Kingfisher brand, were still in their early stages and any potential deal was some time away.
A spokeswoman for Heineken in Amsterdam declined to comment. A spokesman for UB Group, Mallya’s group holding company, said there had been no discussions on a stake sale in United Breweries.
Mallya and firms owned by his group own 32.61 percent of the Indian brewer. Sources said it was premature to say if they would retain a minority stake in United Breweries if and when the planned Heineken share increase is completed.
Heineken indirectly acquired a 37.5 percent stake in United Breweries following its worldwide takeover of Scottish & Newcastle in January, 2008. Subsequently, Heineken raised its stake to 42 percent, via open market share purchases.
India’s beer market growth is significantly higher than the world average, but the overall market is small. Indians consume on average about 2 litres of beer a year, compared with 18 litres in Asia and 57 litres in western Europe, a Moody’s note said in July.