Carlsberg buys India brewery stake from Lion Brewery Ceylon

Carlsberg buys India brewery stake from Lion Brewery Ceylon

Carlsberg has bought back a 22.5% stake in its Indian beer subsidiary from Sri Lanka-based Lion Brewery Ceylon.

Carlsberg has paid LKR2.18bn (US$19.9m) for Lion Brewery's 22.5% shareholding in Carlsberg India, formerly known as South Asian Breweries, a spokesperson for the Denmark-based brewer told just-drinks today (1 June).

Late last week, Lion Brewery announced that it had completed the deal, but it did not disclose the size of the stake sold or the price tag.

The deal gives Carlsberg greater control over its operations in India's fledgling beer market. It also provides Lion Brewery with more resources to concentrate on growing consumer demand for beer in Sri Lanka.

Carlsberg will retain a 25% stake in Lion Brewery and will, therefore, maintain a "close relationship" with the Sri Lankan group, Carlsberg's spokesperson said. "After the end of the civil war in Sri Lanka, market conditions have become much better and Lion Brewery wants to invest in its home market," he added.

Separately, Lion Brewery said: "The board is conscious of Sri Lanka being the company's home market and, as such, is of the view that maintaining its focus on the current market position is the top most priority." Lion constitutes around nine out of every ten beers sold in Sri Lanka.

The group added that its continuing operations in India might have required an investment of up to US$200m "over the next few years". In contrast, by selling the stake in Carlsberg India, Lion Brewery will be free of debt.