The UB group has acquired the GMR-owned brewery, GMR Vasavi, at Srikakulam in Andhra Pradesh for Rs 57 crore in an all-cash deal.
The acquisition was done through a special purpose vehicle (SPV) floated by UB along with European brewer Scottish and Newcastle (S&N). Both the brewers have an equal shareholding in te SPV with the balance equity owned by the Ravi Jain-led management in the ratio of 40:40:20. ING Barings was the advisor to the buyout.
GMR Vasavi has an installed capacity of 1.2 lakh hectolitres, with the Andhra government having given its nod for enhancing it to 2.45 lakh hectolitres.
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The acquisition will make UB the largest brewer in the beer-deficit state. AP is the second-largest beer consumer in the country and the present trend indicates that it would soon emerge as the largest beer consuming state. The UB group already has a manufacturing base in the Twin City area.
S&N will invest around Rs 165-175 crore in the SPV. The SPV plans to acquire brewery assets and brands, which also will include assets of BrewCo, the demerged beer business of UB.
The SPV has already identified two breweries in the south which it plans to acquire shortly. It is already in talks with Empee group to buy its brewery business. The group has a brewery each Tamil Nadu and Kerala.
The special purpose vehicle will also have market Millennium Alcobev's brands such as Kalyani Black Label Strong, Bullet and Charger.