Heineken, Carlsberg, to enter Indian brewery market

Heineken and Carlsberg, the world’s leading beer giants, are planning to enter Indian brewery market. The two are exploring to acquire significant stakes in Mount Shivalik groups, which controls two companies- Mount Shivalik industries and Mount Shivalik group. They are the biggest manufacturers of beer in India.

The executive director of Mount Shivalik, Monish Bali, admits that they are in discussion with Heineken but the discussions are just in a preliminary stage. He also said that the deal will take some time to come to a conclusion.

The other beer manufacturer, Carlsberg, is also in India to fix a deal with the senior officials of the Mount Shivalik group.

When the country representative of Carlsberg, Amit Garg was contacted, he said that he was not authorized to speak anything right now to the press.

The Mount Shivalik group has a combined turn over of Rs.250 crore and want to bring the whole brewery operation under one platform and therefore looking at restructuring the entire breweries.

It is expected that the promoters’ stake in the combined companies will be 60%. Sources also say that the Mount Shivalik group will get a higher valuation once the restructuring is done. Bali, however, refuses to give any comment on the increase in valuation. He said that they have not reached that stage as yet and are only at the initial stage of joining hands.

Once the deal is finalized, the two giants will pay a huge premium to enter into India. Since India is the top most growing market in brewery manufacture, foreign companies are ready to invest and pay a hefty premium to join hands with the Mount Shivalik groups.

South African brewery, another big giant, has already paid a premium of Rs. 300 crore for a 50% stake in the brewery division of Shaw Walance.

Bali also said that they are not divesting the majority stake and are only divesting the minority stakes. He further said that they want to consolidate the operation first, before entering into such a big strategic alliance.

The leading brand Thunderbolt and global brands like Stroh’s and Cobra are all manufactured under license agreements by the Mount Shivalik group. 8% of the national market share comes under Mount Shivalik group with an installed capacity of seven million cases split equally between their two plants- Mount Shivalik Breweries in Punjab and Mount Shivalik Industries in Rajasthan.