McDowell AlcoBev, the joint venture between the UB group, Scottish & Newcastle and Ravi Jain, has been officially formalised with the inflow of approximately Rs 180 crore on May 8 from the shareholders.
There is also a further contribution over the next year and committed loan facilities in excess of Rs 300 crore. The shareholders, UB, S&N and Ravi Jain, hold stakes in the ratio of 40:40:20, respectively.
McDowell is acquiring 51.75 per cent of the equity of the publicly listed Inertia Industries belonging to United Breweries and two companies controlled by Ravi Jain.
Inertia Industries owns two breweries in Aurangabad in Maharashtra and Dharuhera in Harayana and owns brands Sandpiper, Zingaro and Turbo brands.
Pursuant to the acquisition, McDowell is making a open offer to acquire 25 per cent of Inertia from other shareholders in compliance with the takeover code.
Following the acquisition of the Delhi-based company, McDowell will have in its portfolio national brands such as Sandpiper and Zingaro and strong regional brands such as Kalyani Strong, Bullet, Turbo, Guru and Marco Polo.
McDowell also owns breweries in Andhra Pradesh, Tamil Nadu and Kerala and has plans to acquire or build additional strategic assets in other key states.
The existing five breweries together account for 55 per cent of the Indian beer consumption. McDowell Alcobev has its own capacity to produce annually over 15 million cases with an additional capacity of 5 million cases from seven breweries under contract.
S&N will also invest approximately Rs 250 crore in United Breweries, the recently demerged beer company of the UB group through an allotment of redeemable optionally convertible preference shares of Rs 200 crore and Rs 500 crore by way of external commercial loan.
S&N and UB have agreed to introduce the Kronenbourg beer brand into India and provide access to Kingfisher beer brand to S&N distribution networks in certain key global markets.
S&N will be offered a seat on the board of UB and the companies intend to share best practices in terms of beer production, technical standards, brand development, marketing and international business practice.
