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 Heineken and kingfisher in link-up11-12-2009Heineken, the world’s number three brewer, has agreed a deal to make and sell its own brand beer in a growing Indian market. It signed a deal on Monday (6) with liquor baron Vijay Mallya, who owns India’s largest brewer United Breweries (UB), to sell the brand and Mallya’s Kingfisher brand can lean on Heineken to expand in Europe. “Finally Heineken has a clear growth strategy in what we consider one of the most exciting beer markets for the next 20 years,” said Heineken chief executive Jean-Francois van Boxmeer. Heineken did have an interest Asia Pacific Breweries, which is in competition with UB in India.
The Indian beer market, which has been experiencing double-digit volume growth, is expected to expand. Per capita consumption is about 1.3 litres per year, compared with more than 50 litres in the developed world.
Robert-Jan Vos, an analyst at Fortis Bank Netherlands, said the deal would be good for Heineken in the longer term. “It looks like it is quite a complex deal, but it seems Heineken’s relationship with UB will improve materially for the Indian market,” he said. “It is a positive deal, they are consolidating their direct and indirect stake in India.”
Heineken took its stake in UBL when it and Carlsberg jointly bought Scottish & Newcastle for £7.8billion in 2008, but Mallya and the other UBL joint venture partners contested the move in legal proceedings.
Mallya and his associates said in a statement released on Monday that after the India deal the legal process would end.
Heineken has now got three seats on the board of UB. In a statement, the two said: “The parties have agreed upon the key commercial terms for the production of the Heineken brand in India. UBL will work with Heineken to expand the international presence of the Kingfisher brand through Heineken’s global footprint.”
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