Sab Close To Acquiring Rajasthan Brewery

South African Breweries (SAB) is understood to be close to finalising a deal to acquire a stake in Rochees Breweries in Rajasthan, while it is in talks with Mohan Meakins and the GMR Vasavi group to acquire stakes in their breweries.

Sources close to SAB said with the acquisition of a majority stake in Rochees Breweries in Rajasthan, the company will be able to add another one lakh case capacity to its 6 million case capacity it has in India. Both SAB and Rochees are understood to have signed an pact recently for negotiating the deal.

While refusing to confirm the news, South African Breweries India Ltd managing director Richard Rushton said the company in-principle would take at least a majority stake in its joint ventures.

 

He said SAB had a war chest of around Rs 600 crore for acquiring breweries and brands and promotion in India.

South African Breweries is the fourth-largest brewery company in the world with a market capitalisation of around $6 billion. Some of its brands include Castle Lager which will soon be available in India, Carling Black Label, Pilsner Urquell. SAB is also a franchise bottler for the Coca-Cola company in South Africa.

It is learnt that SAB is also in talks with the UB group which wants to sell 26 per cent stake in its beer company to a strategic partner.

SAB is understood to have till now bought around 94 per cent stake in Mysore Breweries Ltd (MBL) through a mix of open offer and buying over of the promoters' stake of around 76 per cent at Rs 500 per share. It bought the promoters' stake for around Rs 108 crore. It also bought the entire stake in Narang Breweries and now has access to its 1.5 million case capacity.

Sources also said that there will not be any internal restructuring in Mysore Breweries Ltd with the promoter and the current managing director and non-executive chairman K P Balasubramaniam being asked to continue in his post. There also plans to market its recently-launched Bengal Premium Lager, in other countries too.

According to MBL, Bengal Premium Lager has within a short of period of time become one of its most popular brands. MBL's another brand, Knock Out is sold in the domestic market and is one of the largest selling brands in the country.

Sources said Rajasthan was a major market in the north as beer is sold more in that state than in any other state. Hence, SAB was keen to set up its base in the state through the acquisition of a brewery there.

Sources said though GMR Vasavi's brewery in Visakhapatnam did not have a brand, its capacity of 2 lakh cases was a major attraction for SAB to eye the group.

SAB International Ltd's Andre Parker earlier told newspersons that the company was planning to increase its market share in India to around 25 per cent in three years. The former SAB India managing director Roy Bagattini said the current market size for beer in India was around 72 million cases which is expected to trebel in the next 10 years. The per capita consumption in India for beer was 0.6 litres compared with 88 litres in the US.