It was the last remaining jewel in Vijay Mallya’s crown, but with Dutch beer maker Heineken slowly raising its stake in United Breweries Ltd (UBL), that, too, seems to be slowly slipping away.
On July 7, United Spirits Ltd (USL) sold its 3.2% stake in UBL for Rs 872 crore. Heineken bought out the entire stake, raising its total shareholding to 42%. The deal brought down Mallya’s stake in the company to 32% .
This change in shareholding pattern is expected to give more operational flexibility and control to Heineken. People tracking the Indian beer industry said the prospect of increased control in a growing beer market, which has the potential to become the second-largest in the world, after China, is too good to resist.
“UBL could now ramp up its game in the premium beer segment, thereby boosting its margins,” an analyst with a leading Mumbai-based brokerage said.
Heineken is brewed in India and the industry won’t be surprised if it’s products are promoted more.
“We believe in the Indian beer market and UBL’s long-term future and are happy to increase our exposure to potential future upsides,” Heineken said.