International liquor major South African Breweries (SAB) is acquiring a majority stake of 60 per cent in domestic beer manufacturing company Associated Breweries & Distilleries Ltd (ABD).
"SAB, through its Indian subsidiary South African Breweries India, is picking up a majority stake in ABD to form a joint venture," Zinia Lawyer, director, ABD, said.
Confirming that talks between SAB and ABD are at an advance stage, Narang Industries Ltd managing director Devin Narang _ one of the stakeholders in SAB's Indian subsidiary _ declined to disclose further details of the deal.
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He, however, said that being one of the stakeholders in SAB's subsidiary, Narang Industries is also a party in the deal.
Narang Industries holds 15 per cent in the domestic arm of SAB. A 60 per cent stake in the joint venture is being held by SAB, while the rest 25 per cent lies with Hallvard Ltd, an overseas investor.
According to an ABD source, the promoters are diluting 60 per cent of their stake in the company in favour of SAB.
Declining to disclose further details on the deal, Lawyer said that the exact amount of the stake and the money factors are still being negotiated, and the deal is likely to be finalised soon.
Lawyer also said that the joint venture and strategic tie-up are formed to further strengthen the company's position in the domestic market.
"A memorandum of understanding between the two parties has already been signed and a proposal to this effect will be soon sent to the Foreign Investment Promotion Board's approval," she said.