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India, Bangalore: SABMiller rejected an outright bid for United Breweries (UB) Ltd however it announced that it is looking at acquiring independent regional brewers in India. This comes in the wake of industry speculation that SABMiller has plans to take a stake in UB, setting the latter's stock on fire in recent weeks, Sify Finance revealed on November 19.

SABMiller controls Shaw Wallace Breweries Ltd, the second largest domestic brewer with roughly 35 % market share. It assumed management control of the domestic brewer following a $133-million transaction to buy 50 per cent stake in May 2003. "We are open to acquiring smaller regional breweries in India as part of the growth strategy. In fact, we are in talks with two of them at present as part of a continuous process. We will take a decision on the acquisition of these smaller independent brewers if it comes at a right price and depending on synergies they offer in terms of footprint and strategic fit to the brand portfolio," Andre Parker, Managing Director (Africa & Asia), SABMiller, told Business Line from Johannesburg.

However, Parker ruled out discussions to pick up stake in UB, which accounts for nearly 45 per cent of the country's annual beer depletions. "We have not had any talks with UB. Let me clarify this. As far as we are concerned, UB and its Chairman Vijay Mallya have a foreign strategic partner for their business in Scottish & Newcastle," he said.

Replying to a query whether SABMiller would participate in a bidding process, if UB unveiled one, he added: "It is purely hypothetical''. The UB stock has been on a rampage (climbing to 52-week high of Rs 294 on Thursday) following speculation that its Chairman has entered into an understanding to sell a strategic stake to a leading global brewer, either SABMiller or the Belgium-based Interbrew.

Mallya had told Business Line in recent weeks that he has been receiving unsolicited expressions of interest from several international brewers and he may put them before the company's board irrespective of the current ties with UK's Scottish & Newcastle.

Parker, while expressing some concern about the profitability of the Indian beer industry, said SABMiller was satisfied with the way it has completed the merger of its local operations with Shaw Wallace Breweries. "I would say we are working well with our partner (the Manu Chhabria family). We have a third of the Indian beer market and all our key brands - Haywards 5000, Knock Out and Royal Challenge - have reported significant growth. Our research on the brand health is positive, and we are also impressed with our managerial talent in India," he said.


21 November, 2004