Scottish & Newcastle, the UK's largest brewer, is to announce today that it has bought a minor shareholding in India's largest brewer United Breweries (UB), according to Indian  reports.
 
S&N has made no comment on the possible deal, but the UK brewer is known to have been one of a number of brewers involved in talks concerning an alliance with UB.

UB Chairman Vijay Mallya said has been searching for a strategic partner to bring international brands to India and help UB market its well-known Kingfisher beer brand abroad, since last April.

It is thought S&N's success is in part due to its decision to accept a minority holding. Other brewers such as Belgium's Interbrew and South African Breweries wanted a controlling stake, which UB was unwilling to agree to.

Drinks analysts at investment bank WestLB Panmure said the move would ease the company's shareprice because of the inverse relationship between country risk and EV/EBITDA valuations.

However the move would also dilute S&N's traditional European focus and give the group exposure to growth markets.

The Times of India newspaper reported today that S&N has agreed to buy a 31% stake in UB and an identical 31 percent stake in Millennium Alcobev, another company of the UB group, for a total of 4.7 billion rupees (US$97 million).

However, a Reuters report said sources in London thought, while S&N would take a minority stake in UB, the size of the stake and the purchase price mentioned in the paper were incorrect.