Heineken International increases its stake in United Breweries by acquiring United Spirits Limited

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United Breweries Group commonly known as UB Group is an Indian public conglomerate company of beverages. A conglomerate  company includes a  combination of two or more corporations engaged in entirely different businesses that fall under one corporate group, usually involves a parent company with many subsidiaries. It is headquartered in Bengaluru in the state of Karnataka and the company’s present chairman is Vijay Mallya.Their core business includes beverages and is the largest producer of beer in India with around 48% of market share  by volume.

The company markets beer under the brand name Kingfisher and also owns various other brands of alcoholic beverages. United Spirits Limited (USL) is the subsidiary of the United Breweries Group and is the world’s second largest spirits company by volume and exports its products to about 37 countries in the world. It is headquartered at UB Tower in Bengaluru, Karnataka. Diageo took over the control of United Spirits in November 2012 as it had acquired 55% stake of USL in for a consideration amount of Rs $3 billion. Diageo is a British multinational alcoholic beverages company and  the world’s largest producer of spirits .It is also a major producer of beer and wine and has its headquarters at LondonEngland.

United Spirits disclosed in last October that they are planning to monetize certain non-core assets of the company. As a part of this policy United Spirits has exited from Vijay Mallya led United Breweries by selling its entire stake of 3.21% to Heineken International. Heineken International is a Dutch brewing company  and owns more than 165 breweries in more than 70 countries. Their main item is Heineken Lager Beer which has a great demand all over the world and also brews and sells more than 250 international premium special beers.

The disinvestment by USL was done by selling 8.5 million shares of USL at Rs 1030 per share which amounted to a total of Rs872 Crore.As soon as Heineken International acquired USL, its   share price rose by 2% to Rs 3499.55 and on the other hand United Breweries shares fell 1.08% amounts to R1014.10 as listed on the BSE. This acquisition increased the stake of Heineken on United Breweries to 42% and Vijay Mallya, the UB Group chairman currently holds only 32.8% stake in United Breweries.

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