Scottish & Newcastle to buy stake in India's UB

Modern Brewery Age,  Jan 24, 2005  

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Scottish & Newcastle has announced that it is investing $171 million for a 37.5 percent stake in United Breweries, the largest brewer in India. UB is chaired by Vijay Mallya, the brewing impressario who bought Mendocino Brewing Co. and other U.S. micros in the mid-1990s.

S&N and UB have operated a joint venture in India for some time.

S&N will have joint management control, together with a group of shareholders led by Mr. Mallya. Scottish & Newcastle and United Breweries will each appoint two directors to the board of United Breweries and will jointly appoint three independent non-executive directors.

The two companies will combine their Indian brewing interests, and together will control more than half the market in the country. The deal must still be approved by shareholders and Indian regulators.

"The combination of Scottish & Newcastle and United Breweries will strengthen the strong leadership position that United Breweries holds in a fast-growing market of enormous long-term potential," said Tony Froggatt, S&N CEO. "The agreement is a natural development of our successful joint venture with UB. It also represents an expansion of S&N's presence in India, demonstrating our commitment to investing in this exciting economy."

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