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April 6, 2001
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Money > Business Headlines > Report April 6, 2001 |
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UB to buy full Associated Breweries pie in two yearsReeba Zachariah Vijay Mallya's United Breweries is planning to take full control of the Bombay-based Associated Breweries and Distillers. The UB group picked up a 65 per cent stake in the company in November last. Ravi Nedungadi, president and chief financial officer of the UB group, said: "We are now planning to buy the remaining 35 per cent stake held by Zinia Lawyer and family over the next two-year period." The company picked up the 65 per cent stake in the closely-held company owned by the Irani family for over Rs 50 crore. UB group chairman Vijay Mallya said, "UB snatched the deal from the international beer behemoth, South African Brewery, which was close to clinching the deal." According to industry sources, UB went on the buy the pie to prevent Indian breweries from falling into the hands of multinational beer giants. Through this acquisition, the UB group has added to its portfolio the brands of Associated Breweries such as London Pilsner, London Diet, Maharaja Premium, London 2001 Plus and London 5001 Plus. An additional advantage UB has gained is the exclusive licensing for the manufacture of San Miguel. Associated Breweries manufactures these brands at its brewery in Thane. Industry sources added that the brand portfolio expansion will help UB offer differentiated products. The beer major now has the chance to push up sales through effective price segmentation. Maharashtra, the biggest market for beer, had registered sales of 13 million cases for the financial year 1999-00. Andhra Pradesh clocked sales of 11 million cases and is expected to touch 16 million cases by 2002. "There is a shift in consumption pattern to beer from toddy," analysts said. UB sold 35 lakh cases in the Bombay-Maharashtra region and 24 lakh cases in Andhra Pradesh for the fiscal 1999-00.
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