Heineken increases presence in India
The Dutch beer group will form a shareholders’ partnership with a major Indian beer brand to distribute Heineken in the fast growing market.Amsterdam – Dutch beer group Heineken on Monday announced it was linking up with major Indian brand Kingfisher in a bid to increase its presence in one of the world's fastest growing beer markets.
Heineken said it had agreed to form a shareholders' partnership with Vijay Mallya and his United Breweries Ltd (UBL), the Kingfisher maker, to distribute Heineken beer "in oneof the world's fastest growing and most exciting beer markets."
The deal was accompanied by an announcement that Heineken was to buy India’s Asia Pacific Breweries Ltd (APB), a successful joint venture with Fraser and Neave Ltd.
This transaction would be achieved by transferring Heineken's controlling interest in PT Multi Bintang Indonesia (MBI) and Grande Brasserie de Nouvelle-Caledonie S.A. (GBNC).
"This will create a more profitable business and a stronger platform for growth in South East Asia and the Pacific Islands," the company said.
Subsequently, Heineken would transfer the APB entity to UBL during 2010.
"As a result of the transactions, an exceptional book gain of EUR 145 million before tax will be realised in 2010. Consolidated net debt is expected to be reduced by approximately EUR 175 million."
Heineken chairman and chief executive Jean-Francois van Boxmeer said: "In the world of beer, there is no bigger or more exciting growth opportunity than India.
"We have long regarded a strong Indian presence as important in order to increase our exposure to and growth from developing markets.
"We are therefore extremely proud to announce our partnership with UBL, the strong market leader."
He also said that at the same time "the integration of our Indonesian and New Caledonian businesses with our joint venture Asia Pacific Breweries, considerably strengthens our platform for growth and our leadership position in South East Asia and the Pacific."
“Heineken is among the most respected and recognized names among beers all over the world. The combination should help United Breweries to further its leadership position in the years to come,” said UBL’s head, Mallya.
Kingfisher is India’s biggest-selling beer brand and sells in more than 50 countries around the world.
At present the Indian population drinks an average of just one litre of beer a year per person, compared to the dozens of litres downed annually by the Dutch. Heineken currently exports a million litres of beer a year to India. By brewing beer locally, it will be able to bring the beer on the market faster.
AFP / Radio Netherlands / Expatica