S&N to take 37.5% in UB in Rs 940 crore deal

The Vijay Mallya-controlled United Breweries Ltd (UB) on Sunday said it had signed a pact with the UK-based beer major Scottish & Newcastle ...

The Vijay Mallya-controlled United Breweries Ltd (UB) on Sunday said it had signed a pact with the UK-based beer major Scottish & Newcastle where S&N would pick up a 37.5 per cent stake in UBL. The total size of the deal, including an open offer and an issue of preference shares, works out to Rs 940 crore.

Subsequent to the open offer, Mallya and his associate companies would hold an identical stake to S&N, at 37.5 per cent, in the company. As per the agreement between the two parties, S&N will receive 17.5 per cent of UBL’s equity by way of a preferential

allotment for a sum of Rs 217 crore at Rs 575 per share.

‘‘S&N would also invest around Rs 247 crore in UBL by way of non-convertible redeemable preference shares with a coupon rate of 3 per cent,’’ UBL chairman Mallya said at a press conference in Mumbai.

Following this, S&N will make an open offer to acquire up to 20 per cent of the equity of UBL at Rs 575 per share. Mallya said, ‘‘The company’s board of directors on Sunday approved the transaction by which S&N would make a public offer to acquire up to 20 per cent of UBL’s paid up equity at the same price.’’ Under the deal, the operations of Millennium Alcobev Ltd, a company in which S&N has already invested around Rs 180 crore, would be combined with UBL.