The Hindu Business Line : UB may gain control of Foster's Indian business

Acquisition plans
Scottish & Newcastle, bidding for the assets of Foster's, which has decided to exit from India, Vietnam, China, Fiji, and Samoa.
The entire deal for the Asian operations is worth over £80 million.
UB earmarks over Rs 300 crore in the next three years to expand its operations in the country.

Bangalore , April 4

UB has said that if Scottish & Newcastle wins the bid to take over the assets of the Asian operations of Foster's, its Indian operations will come into UB's fold. Scottish & Newcastle is an equal shareholder along with Vijay Mallya and his associates in UB.

"There has been lot of speculation on this issue. We are bidding for the Indian piece of the business jointly," the UB Group Chairman, Mr Vijay Mallya, told Business Line. "The Indian piece will come to us, in case the bid is won."

Scottish & Newcastle and a few others are bidding for the assets of Foster's, which has decided to exit certain Asian countries including India, Vietnam, China, Fiji, and Samoa.

Foster's has a brewery each in India (Aurangabad) and China and according to industry sources, it runs a profitable business in these two countries.

The entire deal (Asian operations), according to sources in the industry, is worth over £80 million.

Scottish & Newcastle, which owns 37.5 per cent of UB, is also looking at launching its own brands in India through the joint venture.

UB has earmarked over Rs 300 crore in the next three years to expand its operations in the country.

Foster's, makes more money at home than abroad, wants to focus more on its domestic beer business and on wine. Scottish & Newcastle markets Foster's in Europe. In India, most of Foster's sales have come from Maharashtra and Delhi.

It has single-digit market share of the premium end of the beer market.

Regionwise, its share is slightly bigger in Maharashtra and Delhi. UB has nearly 50 per cent share of the beer market in the country, while SAB Miller owns a third.

Sources said that Foster's did fare better than other MNCs when it first entered the Indian market in 1998 but its locational disadvantage and the huge cost of setting up a high-quality brewery hampered its efforts to spread into other States in the country.

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