India: United Breweries and Scottish & Newcastle completed the transaction to acquire 20% in Alcobev
United Breweries (UB) and the UK brewer Scottish & Newcastle (S&N) announced they have completed the jointly acquisition of strategic partner Ravi Jain’s 20% stake in Millennium Alcobev (MABL) for about Rs 18 crore, India Times communicated on March 14. The deal marks a significant step towards the merger of MABL with UB.
“We have completed the transaction to acquire Mr Jain’s stake valued at between Rs 15 crore and Rs 20 crore,” said a top UB official. UB and S&N will equally split Mr Jain’s 20% stake. Incidentally, Mr Jain will attract a three year non-compete clause.
This could keep the 58-year-old professional-turned entrepreneur out of the alcoholic beverage sector for a while, which is significant as Mr Jain’s exit comes at a time when a host of global brewers are charting their India entry plans.
Mr Jain, an acclaimed brand builder in the domestic Alcobev domain, was the former MD of Shaw Wallace (SWC) before joining hands with UB chairman Vijay Mallya to start MABL.
ET had first reported about Mr Jain’s expected parting of ways with Mr Mallya in August last year. MABL was floated as a 40:40:20 JV between UB, S&N and Mr Jain in ’01.
The company with brands like Sandpiper, Zingaro, Bullet and Marco Polo reported annualised volume depletions of 10m cases in ’04-05. With S&N picking up equity in UB directly, MABL’s operations were integrated with the latter in the first half of last year.
Sources said the delay in settling with Mr Jain was partly due to the issue of valuation as MABL carried Rs 250 crore debt and a significant loss in its balance sheet.
MABL’s merger with UB will not be a straight-forward case as a legal merger would burden the latter’s balance sheet by an additional Rs 300 crore, added sources. UB, in which both Mr Mallya and S&N hold 37.5% stake each, currently carries Rs 188 crore as debts. The merger could see UB’s debt soaring to nearly Rs 500 crore.
Wstecz
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