Heineken buys an additional 0.7% in United Breweries for Rs152 cr
17 September 2016
Dutch brewer Heineken on Friday bought 1.85 million shares of United Breweries Ltd in a bulk deal, in an open market transaction on the Bombay Stock Exchange (BSE). to raise its stake in the Indian Brewer by an additional 0.7 per cent.
The acquisition raises the Dutch brewer's stake in United Breweries to 43.7 per cent, helping it to further tighten its grip over the Vijay Mallya-led brewer of Kingfisher beer.
United Breweries shares rose nearly 9 per cent intraday on Friday after the open market deal at a price of Rs822 apiece. The cost of acquisition for Heineken works out to around Rs152 crore ($22.7 million).
Heineken bought the stake from Yes Bank, stock exchange filings show.
While details of the shares are not known, Vijay Mallya, the co-promoter of United Breweries, had pledged 3,02 per cent shares of UB with Yes Bank in November last year. The shares of United Breweries were pledged by McDowell Holdings, a part of Mallya's UB Group.
Mallya, who faces several charges over non-payment of bank loans raised by group firms, is currently living the life of a fugitive in the UK, after being labelled as 'wilful defaulter' by several banks.
Mallya lost control of United Spirits and in February stepped down from its board after a tussle with Diageo.
UB Group held 30.86 per cent stake in United Breweries as of 30 June 2016. That is currently worth Rs6,756 crore or just over $1 billion.
Heineken had, in March this year, spent Rs179 crore (about $27 million) to pick a 0.8 per cent stake in United Breweries from an NBFC arm of Edelweiss.
Earlier, in July 2015, it had bought Diageo-controlled United Spirits' entire 3.21 per cent stake in United Breweries for Rs872 crore ($137 million).
Heineken is the largest shareholder in United Breweries, holding 43 per cent stake in the company while Vijay Mallya and his group companies' shareholding stood at around 30 per cent as of June 2016.
Most of Vijay Mallya's shares are pledged to banks and some offered as security to Diageo as part of loan guarantees extended to F-1 team Force India. Mallya's own shareholding in the company stood at 8.08 per cent
United Breweries owns a clutch of brands besides the flagship Kingfisher, including Kalyani Black Label, Zingaro, Guru and Bullet.
Heineken International is a Dutch brewing company. It owns over 119 breweries in more than 65 countries.
The company brews and sells more than 170 international premium, regional, local and specialty beers, including Cruzcampo, Tiger Beer, Starobrno, Zagorka, Birra Moretti, chota, Murphy's, Star and of course Heineken Pilsener.