The more than year old dispute between Vijay Mallya’s UB Group and Heineken N.V., Europe’s largest brewer, has been resolved.
Each party holds a 37.5 per cent stake in United Breweries Ltd. They signed a new shareholder’s agreement on Monday, and decided to withdraw all litigation proceedings initiated in the past.
Heineken had inherited the interests of Scottish & Newcastle, in UBL.
Heineken and Carlsberg had acquired Scottish & Newcastle for $15.4 billion in January, 2008. Mallya raised objections to some of the inheritance rights.
“All differences have been resolved after discussions and we are making a new beginning,” Vijay Mallya, Chairman UB group said in a conference call from London. “The new shareholders agreement is pretty similar to that of S&N.”
As per the agreement Heineken will be active in India solely through UBL, which will brew its brands in India. And Heineken will brew and market Kingfisher beer in the global markets in which it is strong.
“In the world of beer, there is no bigger or more exciting growth opportunity than India,” said Jean-François van Boxmeer, CEO and chairman of Heineken’s Executive Board.
Following the agreement René Hooft Graafland, member of Heineken’s executive board and chief financial officer and Siep Hiemstra, regional president, Heineken Asia Pacific, have been appointed to the board of directors of UBL as Heineken’s non-executive directors. Guido de Boer has been appointed as CFO and executive director of UBL.
As part of the new agreement, Heineken will acquire APB India, a subsidiary of Asia Pacific Breweries. In a subsequent transaction it intends to transfer this into UBL during 2010. The Tiger beer brand which is now under APB India will be transferred to its parents in Singapore and it could be sold through licensing agreement with UBL.
Heineken has also decided to merge its 50 per cent interest in Millennium Alcobev into UBL.