Vijay Mallya may sell United Breweries stake to Heineken: sources

MUMBAI Fri Mar 30, 2012 2:40am IST

1 of 3. Kingfisher Airlines Chairman Vijay Mallya speaks with the media in New Delhi March 20, 2012.

Credit: Reuters/Parivartan Sharma

Stocks

   

MUMBAI (Reuters) - Tycoon Vijay Mallya, scrambling to raise funds to rescue his ailing Kingfisher Airlines Ltd(KING.NS), is considering the sale of all or part of his stake in United Breweries (UB), his flagship beer business, to Dutch brewer Heineken NV, said people familiar with the situation.

They added that Mallya has the option of selling a stake in UB to ease his financial woes, and Heineken would be a keen buyer to gain control of India's biggest brewer and maker of Kingfisher beer.

The Amsterdam-based brewer holds a 37.38 percent stake in UB as a legacy of its takeover of Scottish and Newcastle in 2008. The purchase of 13 percent, valued at $370 million at current market prices, would be enough to take Heineken over the 50 percent mark.

Mallya owns around 19 percent of UB and has held talks with a number of different parties to try and raise cash for his ailing Kingfisher Airline. There are no active talks going on at the moment with Heineken, the people said.

"Mallya is clearly looking at all his options and if he did look to sell a stake to give Heineken control of United Breweries then he would find a willing buyer," said one person with knowledge of the situation.

A spokesman at Mallya's UB Group did not answer calls or reply to text messages from Reuters. A spokesman for Heineken declined to comment.

United Breweries (UBBW.NS) controls around half the fast-growing Indian beer market with SABMiller Plc having around a third, but beer consumption is still relatively low at less than 1 litre per person per year compared with China at close to 30 litres and western Europe of around 60 litres.

The Financial Times reported that Mallya was close to selling a 13 percent stake in UB to Heineken, while the Business Standard newspaper said he may be looking to sell part of his holding and invest some of the process in his airline.

Mallya is under pressure from his airline's lenders to inject equity into Kingfisher, which has debts of $1.3 billion and has slashed its flight schedule and grounded most of its fleet as it has been unable to pay staff.

Mallya's UB Group confirmed it had entered talks with the world's biggest spirits group Diageo Plc in late 2008 about buying a stake in his 38.7 percent-owned United Spirits company. But the talks broke down in 2009 after Diageo was offered a high-priced small stake and saw no future path towards increasing its holding or influence.

Shares in United Spirits were up 1.4 percent and United Breweries were up 0.6 percent in Thursday trading.

(Additional reporting by Philip Blenkinsop in Brussels and David Jones in London; Editing by Ranjit Gangadharan and David Holmes)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
Prashantgairola wrote:
Vijay Mallya may sell United Breweries stake to Heineken:sources. To raise funds to rescue his ailing Kingfisher Airlines Ltd.
Vijay Mallya in thanks to Heineken, will change it’s Kingfisher Airline name to SLAVE-OFF-HENS…………….. bAHAHAHAHA!!

Mar 29, 2012 12:54am IST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage