Heineken Says Hello To Good Times With Rs 872 Crore Kingfisher Takeover

They say money can’t buy everything. Well Heineken just proved that wrong by buying a chunk ‘good times’ in a Rs 872 crore deal. 

The United Spirits (USL) exited United Breweries and sold 85 lakh equity shares to Heineken, which will now give it the authority to manage affairs of India’s largest beer producer.

To give you a broader perspective of why this sale is a big deal – apart from the whopping 872 crores – USL is the owner of 140 brands, which includes stalwarts like Black Dog, Royal Challenge, Four Seasons and McDowell’s among many others.

The Beer Barter

USL sold 3.21% shares for Rs 872 crore in a block trade. The shares were sold at Rs 1,030 apiece, a slightly over Tuesday’s closing price of Rs 1,014.10.

Now, the Heineken’s stake in United Breweries (UB) has increased from 39% to 42.1%. This deal will give Heineken an upper hand over Vijay Mallya in running the company.

USL said that following the completion of this sale, it will “hold no shares in UBL and will cease to be a promoter of United Breweries”.

“It clearly shows that United Spirits is going quick on sale of non-core assets. The next target is going to be the IPL cricket team. The company can raise almost Rs 2,000-2,500 crore in the next two years,” Abneesh Roy, an analyst at Edelweiss Securities, told The Economic Times.

What About The King?

Vijay Mallya is not in any danger of losing control of his firm, as he will continue to hold 37.5% and the two partners will have the same shareholder rights.

But Heineken could dictate the company’s business plan as it has higher shareholding.

Although from where we are looking, it seems like one Beer moolah is going to call the shots for a fellow beer moolah! Looks beer-y good.