New Delhi, Dec. 2: The government today cleared Scottish and Newcastle Plc, the UK-based liquor major’s proposal to set up a Rs 400-crore fully-owned subsidiary that will provide technical consultancy to manufacture, market and distribute beer and channel downstream investment.
The S&N proposal was the largest foreign direct investment, among the 15 proposals worth Rs 490 crore, that were approved today by commerce and industry minister Arun Shourie on the recommendations of the foreign investment promotion board (FIPB), an official statement said here.
Scottish and Newcastle has already formed a strategic partnership with the UB group under which it is expected to invest Rs 390 crore in two de-merged entities of the Vijay Mallya-owned group — UB Beer Ltd and McDowell Alcobev Ltd — in the form of equity and preference shares.
In October, the Department of Company Affairs (DCA) had approved in principle the scheme for demerger of the UB group and the acquisition of shares in the demerged entities by Scottish and Newcastle.
This will mark Scottish & Newcastle’s India foray. The £4.2 billion UK-based liquor major has business interests in the UK, France, Belgium, Finland and Portugal.
UB is also considering an expansion and restructuring process under a scheme of demerger pursuant to which the UB group will split operations of United Breweries Ltd into a core-beer business, known as UB Beer Ltd, and other non-core businesses.
The scheme of demerger was recently approved by the Karnataka High Court.
S&N venture will focus on cash and carry wholesale trading, manufacture of confectionery items and providing consultancy in manufacturing and marketing beer.
Among the other proposals cleared today, Singapore-based Jurong Infra Global Pte was permitted to set up a wholly-owned subsidiary for designing, engineering, procurement and construction activities and projects at an investment of Rs 27.3 crore.