India: InBev is to bid for Mohan Meakins' beer business; other beer giants are interested as well

InBev, the world's leading beer maker by volume, is considering a bid for Mohan Meakins' (MML) beer business. The brewery took the decision exactly when the last date to submit bids called by the promoter family has been extended to December 23, India Economic Times communicated on December 21.

December 19 was the initial deadline for bids. No bids have been submitted till now, even though SABMiller is likely to be the most aggressive bidder with Asia-Pacific Breweries (APB), the Singapore arm of Heineken, being the other contender in the race.

Another brewer that showed interest is Carlsberg. The brewery has reportedly withdrawn from the race. PricewaterhouseCoopers (PwC), which is involved with the restructuring of Mohan Meakins, refused to comment.

Market analysts commented: “If InBev goes ahead with the bid, it may queer the pitch for both SABMiller and APB. Incidentally, InBev has been in negotiations with one of India's largest soft drink bottler, Ravi Jaipuria, for a joint venture to foray into the domestic market.” Mr Jaipuria has already sealed a deal for bottling InBev's Beck's beer in his Mauritius brewery. The alliance for the Indian market is said to be in the final stages of making.

Informed sources said InBev is yet to firm up its interest in MML's beer assets. “Not as yet,” quipped a source. In '04, InBev came close to picking up a stake in leading domestic brewer UB, but lost the race to UK brewer Scottish & Newcastle (S&N). Even though InBev's commercial team could be directly involved with the due diligence process, a formal bid may be routed through the local partner, added sources.

Meanwhile, it is learnt that MML's associate company in Chennai, the independently-managed Mohan Breweries, is also likely to exit the beer business, paving the way for a larger deal.

SABMiller has an existing contract manufacturing tie-up with the Chennai plant, making it probably the most aggressive bidder in the fray. Even as most industry observers tend to believe that the promoter family would go ahead with the sale, there is suspicion that the process could collapse after the bidders place their valuations. Some observers said it would be interesting to see if the family could pull along together in deciding on the best sale value.

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