Heineken takes control of Kingfisher beer maker United Breweries

 Heineken takes control of Kingfisher beer maker United Breweries

Dutch brewing giant Heineken NV has increased its stake in United Breweries Ltd (UBL) to 61.5% from 46.5%, taking control of the Indian brewer 13 years after it first bought into the company.

Heineken said Wednesday it acquired an additional 39.64 millions shares in UBL. It didn’t specify the amount.

However, stock-exchange data showed it bought the shares at Rs 1,471.25 apiece. This totals to around Rs 5,832.7 crore ($787 million) to buy the additional stake.

Heineken was already the single-largest shareholder of UBL, which makes the Kingfisher brand of beer, and had sought antitrust approval to increase its stake earlier this month.

The Dutch company had first purchased a 37.5% stake in UBL in 2008 as part of its takeover of the UK-based Scottish & Newcastle. It raised its stake in multiple tranches over the years. Most recently, it had increased its holding two years ago by purchasing a 2.8% stake for Rs 1,007 crore (around $146 million then).

UBL is a publicly listed Bengaluru-based company once headed by fugitive Indian tycoon Vijay Mallya. Mallya and his group firms owned a stake of around 11% in UBL, but a bulk of this was pledged with lenders.

Mallya left India for London in March 2016, shortly after lenders to his defunct Kingfisher Airlines declared him a wilful defaulter. Earlier this month, the Hindu Businessline newspaper reported that the Dutch beer giant had told Indian agencies it was willing to buy Mallya’s shares as and when the courts allow the lenders to sell them. Indeed, Heineken Wednesday bought the shares pledged with the lenders.

Two years ago, too, Heineken had bought a part of the group’s stake pledged with the Enforcement Directorate, a federal agency that investigates financial crimes.

Heineken has been aggressively looking to expand inorganically. Last month, it approached South Africa’s Distell Group Holdings Ltd to acquire most of its business.

Stellenbosch-based Distell is one of the largest South African alcohol makers with brands like Amarula, Bernini and Hunter’s. It had revenue of ZAR22.4 billion ($1.5 billion) for the year ended June 2020. It commands a market capitalization of $2.2 billion.

Sumit Upadhyaya

The Capital Quest