Scottish & Newcastle (S&N), the UK biggest brewer, has confirmed the press speculation that it will invest in a new joint venture with United Breweries, India#;s largest beer maker to develop and acquire brewing businesses in India.

S&N and UB will each have 40% in the venture and the independent management team of the JV will hold 20%. S&N has also committed to making an investment in the UB brewing business that is to be demerged from the rest of UB.

The UK company said hte investment is likely to be around £60m.

In a statement S&N said: "The agreement reflects S&N's strategy of growing from its strong Western European base through partnerships with local businesses and management who understand the distinctive nature of their own market.

"In India there can be no better strategic partner than the clear market leader UB. The Indian market is an exciting one but it has very particular regulatory and consumer characteristics. The strong management teams of UB and the joint venture have each demonstrated their ability to operate successfully in this market."

India is a beer market of some 5.5m hl and consumption has risen by 10% per annum since 1995. Boosted by regulatory liberalisation in some states, future growth is expected to be even faster, the company said.

The move has sparked speculation in India#;s press that the JV is already on the hunt for acquisitions, particularly in the crucial markets of Andhra Pradesh and Rajasthan.

The combine may also invest in greenfield capacities in three other States - Madhya Pradesh, Orissa and Uttar Pradesh, one newspaper reported.