Financial Daily from THE HINDU group of publications
Thursday, Jan 24, 2002
Alliances & Joint Ventures
Corporate - Alliances & Joint Ventures
UB forges pact with S&N; plans strategic buys
BANGALORE, Jan. 23
THE United Breweries (UB) group, India's number one brewer, on Wednesday announced its intentions to forge a strategic alliance with the UK-based Scottish & Newcastle (S&N).
S&N, a leading European brewer and among the ten top brewers in the world, will bring in approximately Rs 430 crore as investment.
It has a market capitalisation of $5.4 billion and turnover of $6 billion and owns a range of international beer brands, including Kronenbourg, John Smiths and Newcastle Brown Ale, and exclusive rights for the Foster's brand in Europe.
S&N has agreed in principle to invest Rs 250 crore in UB's demerged beer business through a combination of preference shares (Rs 200 crore) and loan stock (Rs 50 crore).Both these instruments will carry an option for conversion into equity, which could result in S&N holding up to 26 per cent equity in UB Beer Ltd.
S&N also intends to invest Rs 165-175 crore in a joint venture company with the UB group.
The two will have shareholding of 40 per cent each, with the rest being held by the management.
Mr Ravi Jain, former Managing Director of Shaw Wallace and Company Ltd, will manage this proposed joint venture.
The joint venture partners have outlined strategic plans to explore and exploit brewing opportunities within India and have already identified certain strategic brewery assets and brands available for acquisition aggregating an approximate Rs 300 crore.
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