Financial Daily from THE HINDU group of publications
Thursday, Jan 19, 2006
Financial Daily from THE HINDU group of publications Thursday, Jan 19, 2006 |
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Corporate
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Mergers & Acquisitions Mohan Meakins did not invite us to bid for beer biz: Mallya `SABMiller may not have followed bidding norms' K. Giriprakash
Bangalore , Jan. 18 DAYS before the prized beer business of Mohan Meakins is set to change hands, liquor major UB group has accused the company of barring it from bidding for the business. UB has also taken on the UK-based SABMiller, one of the favourites to win the bid, stating that the company may not have followed norms for bidding for an Indian company. "They have barred us (Mohan Meakins) from bidding for the beer business," the UB group Chairman, Mr Vijay Mallya, told Business Line. He said the company did not even send them the required papers to bid for the beer business of the company. "You ask them. They did not give any reason for not inviting us," Mr Mallya said. A Mohan Meakins official declined to comment on UB's statement. Mr Mallya said SABMiller may not have followed norms while bidding for Mohan Meakins' beer business. "Being a foreign company they may have bid in contravention of FIPB norms for acquiring Indian companies," he said. `Norms followed': When contacted, SABMiller's head of media relations, Mr Nigel Fairbrass, said the company had followed all the norms set by the Indian Government. "We strongly refute the allegations made. We have kept the FIPB fully informed of all our activities in India on a regular basis, and we are confident we are fully compliant with all foreign investment regulations," Mr Fairbrass said. Mr Mallya said even if SABMiller gets the beer business of Mohan Meakins, UB will continue to lead the market by a margin of 2 per cent. But according to market sources, SABMiller has around 37 per cent share in the beer market across India, while UB has 40 per cent share. With Mohan Meakins' share at around eight per cent, SABMiller would edge past UB with a total share of around 45 per cent if it bags the beer business. Takeover route: SABMiller has followed the takeover route to enter India, which is considered one of the fastest growing beer markets in the world. Its first acquisition was that of Narang Breweries in Uttar Pradesh in 2000 followed by Mysore Breweries in Karnataka in 2001. Its latest acquisition was that of Shaw Wallace' brewery business in 2005. Its brand portfolio comprises Haywards 5000, Knock Out, Royal Challenge Premium Lager and Castle Lager. The largest brand of Mohan Meakins, which is the third largest beer maker in the country, is Golden Eagle. The total size of the beer market in India is 100 million cases per year with each case consisting of a dozen 650 ml bottles.
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