Dutch major Heineken International, the third largest brewer in the world, has become the largest stake holder in Vijay Mallya-led United Breweries (UBL), effectively wresting the company’s helm.
On Tuesday, it bought from Citicorp Finance India an additional 1.35% stake, or 3.56 million shares, in UB at Rs 772.90 apiece through open market purchases on NSE, upping its over shareholding to 38.76%. Prior to this deal, both Heineken and UB Holdings, as co-promoters, owned 37.41% each in UBL.
It was not immediately clear if Citicorp sold the UB shares in its capacity as an investment banker for UB Holdings or as an institutional investor.
Heineken owns much of its 38.76% UB stake through its Indian subsidiary Scottish & Newcastle India, though Heineken International and Heineken UK hold small stakes.
Heineken had been apparently looking to up its UB stake either through open market purchases or by entering into a deal with UB Holdings. But both companies had denied this talk.
Abneesh Roy, associate director at Edelweiss Capital, feels that the stake buy by Heineken, while reinforcing its commitment to India, will benefit the company. “With financial control in its hand, Heineken has been driving UB’s business of late. It has been introducing new brands in India. So, this additional UB stake seems like a natural progression.”
As per UB’s annual report, Henricus Petrus van Zon was appointed as a director with effect from December 7, 2012. He was then appointed chief financial officer for a three-year period beginning January 1 this year. Vijay Mallya, UB’s chairman, too, had acknowledged Heineken’s contribution to the company’s health and growth in the annual report.
UBL sells leading brands of beer like Kingfisher Strong, London Pilsner Premium Strong and Kalyani Black Label. In December 2004, UBL forged an equal alliance (37.5% stake each) with Scottish & Newcastle to make and market a number of beverages. Later, as Carlsberg and Heineken bought out Scottish & Newcastle, Heineken got a foothold in UBL.
In December 2009, UBL entered into a shareholder agreement with Heineken for manufacturing and distributing Heineken beer in India.
UBL shares closed 0.67%, or Rs 5.20, up at Rs 776.25 on BSE; but UB Holdings closed 2.5% down at Rs 25.70.
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