Heineken has finally sealed a shareholder deal in India with United Breweries.

The Amsterdam-based brewer announced this morning (7 December) that its talks with UB, which have been ongoing for almost two years, will see Heineken nominate three members of United Breweries' board, including the position of CFO.

Its nominee Guido de Boer has been appointed to the post, while René Hooft Graafland, Heineken's CFO, and Siep Hiemstra, regional president of Heineken Asia Pacific, have been appointed as non-executive directors.

The company will also acquire Asia Pacific Breweries' (APB) existing Indian investments for EUR25m (US$37m). Heineken, which owns APB jointly with Fraser & Neave, will buy APB Aurangabad and APB Pearl. Following completion, Heineken will transfer the underlying businesses into United Breweries during 2010.

In return, APB will purchase Heineken's 68.5% interest in Indonesian-based Multi Bintang Indonesia and Heineken's 87.3% interest in Grande Brasserie de Nouvelle Caledonie in New Caledonia. Financial details behind both transactions were not disclosed.

"In connection with the transactions, Heineken and APB will give certain undertakings to each other that will regulate the extent to which Heineken will be restricted from competing with APB in Indonesia and New Caledonia and APB will be restricted from competing with Heineken in India," APB said.

The deal also includes terms for the brewing and distribution of the Heineken brand in India.

APB noted, however, that discussions are "in progress" to ensure that its flagship brand, Tiger beer, continues to be available in the Indian market.

The presence of Tiger in India had been thought to be a major sticking point between Heineken and United Breweries when talks opened early last year, following Heineken's takeover of Scottish & Newcastle (S&N) last January. Heineken had claimed the 37.5% stake in United Breweries owned by S&N.

"We have long regarded a strong Indian presence as important in order to increase our exposure to and growth from developing markets," said Jean-François van Boxmeer, Heineken's chairman and CEO. "We are therefore extremely proud to announce our partnership with United Breweries. Our partnership and the combination of the Kingfisher and Heineken brands will transform our ability to unlock the market's considerable potential and to shape the premium segment.

"Alongside this, the integration of our Indonesian and New Caledonian businesses with our joint venture APB, considerably strengthens our platform for growth and our leadership position in South East Asia and the Pacific.

"Taken together, the agreements announced today represent a powerful, positive development for our future growth and development in Asia."

Heineken and United Breweries' owner, Vijay Mallya, now jointly hold a majority interest of 75% in the Indian company. Heineken holds a 37.5% interest with Mallya and his associates also holding a 37.5% interest. The remaining 25% is held publicly.

An exceptional book gain of EUR145m before tax will be realised by Heineken next year, while consolidated net debt is expected to be reduced by approximately EUR175m.

Click here for further analysis of the deal.