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UB planning to consolidate breweries business

Reeba Zachariah

The Vijay Mallya-controlled UB group is planning a comprehensive restructuring of its breweries operations, which includes merging of all the beer companies of the group. The group has announced that it would offer a 26 per cent stake in the beer flagship to a strategic investor.

Ravi Nedungadi, president and chief financial officer of the UB group, said: "We are considering the possibility of reorganising and consolidating our companies engaged in the beer business."

The companies likely to be merged with United Breweries include the recently acquired Associated Breweries and Distilleries, Gurgaon-based Inertia Industries, Mangalore Breweries and Millenium Alcobev, the company floated by the group and former Shaw Wallace managing director Ravi Jain.

Vjay Mallya said Inertia Industries' Sandpiper brand was marketed by Millenium Alcobev, and Associated Breweries' London Pillsner was marketed by United Breweries.

On the group's proposed exit from the non-core businesses, Nedungadi said, "We are seeking buyers for our non-core businesses such as fertiliser, pharmaceuticals and engineering, and will move out when we get a good price."

UB's major investments outside the alcoholic beverage business are in Mangalore Chemicals and Fertilisers and UB Engineering, where it controls management operations.

The group holds 35 per cent stake in both MCF and UB Engineering. MCF, which fell into the Board for Industrial and Financial Reconstruction net, has turned around and registered profits. The company will also divest its 10 per cent holdings in Hoechst Marion Roussel and Aventis Crop Science India.

The group has appointed IL&FS and Deloitte Haskins & Sells as advisors for the revamp exercise.

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