SABMiller India has cooled on its plans to buy local brewer Mt Shivalik, just-drinks has learned.

Sources close to the situation have told just-drinks today (16 January) that talks between SABMiller and the Bali family, which controls Mt Shivalik, have come unstuck as SABMiller feels the family is valuing the company too highly.

Reports from the country last year claimed that the Bali family had been in talks with Asia Pacific Breweries, and were close to agreeing a price of INR1.8bn (US$40.7m) for the company, despite the Balis initially asking for INR2.5bn.

While these talks were not concluded, SABMiller's acquisition last year of Foster's brewing interests in India for around INR5bn, prompted the Bali family to up its valuation of Mt Shivalik.

The company believes that, if SABMiller paid such a price for only a 2% gain in market share, then the valuation of Mt Shivalik would be at least INR3.5bn, the source said.

It is understood, however, that SABMiller feels that, although Mt Shivalik has a 3% share of market, it does not have any strong brands in its portfolio and the acquisition would just be viewed as taking over Mt Shivalik's brewing capacity, thereby making a price of INR3.5bn too high.

The source also said that the two sides may re-enter talks, as the only sticking point appears to be the price.

When contacted by just-drinks, a spokesman for SABMiller at its head office in London declined to comment.