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INDIA: Millennium Alcobev to merge in to United Breweries

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Millennium Alcobev, the Indian brewing joint venture between Heineken and United Breweries, is set to be merged in to the Indian firm.

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The board of United Breweries (UBL) confirmed to the Bombay Stock Exchange (BSE) yesterday (13 September) that Millennium Alcobev, which consists of three operating companies with breweries located in the Indian states of Haryana, Maharashtra Andhra Pradesh and Tamil Nadu, would be merged into UBL. The merger will be backdated to 1 April, "subject to the requisite approvals from the relevant statutory authorities and stakeholders".

Directors from Heineken and UBL met in Mumbai yesterday, with the executives agreeing that UBL will issue just over 15m new shares as a result of the merger.

"The combined entity will create significant value for all the shareholders and will help in optimising revenue, cost and capital synergies," said Vijay Mallya, the chairman of UBL's parent company, UB Group. "The integration of brewery assets will further strengthen the relationship between Heineken and the UB Group, which have significant growth plans for the coming years."

Millenium Alcobev's breweries have an annual capacity of 33m cases, accounting for around 10% of India's overall brewing capacity, UBL noted. In addition to producing UBL's brands on contract brewing arrangements, the JV also owns the Sand Piper, Kalyani Black Label Strong, Marco Polo, Guru and Zingaro.

Heineken and Mallya jointly hold a majority interest of 75% in UBL. Heineken holds a 37.5% interest with Mallya and his associates also holding a 37.5% interest. The remaining 25% is held publicly.

To read the official statement, click here.


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