Beer hug

New Delhi, Aug. 4: SABMiller Plc will acquire the Indian operations of Australian beer manufacturer Foster’s for Rs 540 crore.

SABMiller, the country’s second largest brewer, today said it has entered into an agreement with the Foster’s group to acquire the Indian operations. However, the deal is subject to regulatory and other approvals, the company said in a statement.

Under the deal, SABMiller will acquire all of Foster’s assets and brands in the country.

“This transaction enhances our existing portfolio in India and provides us an opportunity to increase our premium brand offering. The acquisition also supplies the much needed capacity to fuel the strong growth we have experienced so far this year,” said Andre Parker, managing director — Asia and Africa, SABMiller.

Foster’s India operates a brewery in Aurangabad, Maharashtra, with an annual capacity of 3,50,000 hectolitres.

“This is an outstanding deal for the Foster’s group, struck with one of our most important long-term partners. While the Foster’s brand has enjoyed a great success in India, the opportunity for us to continue to grow the brand profitably from a small production and distribution base, in a challenging market structure, was limited,” said Trevor ’Hoy, group president and CEO, Foster’s.

At present, SABMiller has a 34 per cent market share in India with its closest rival, United Breweries, enjoying the number one slot with a 48 per cent share. A company official said with this acquisition, SABMiller’s market share will go up to 36 per cent this fiscal. The deal is expected to benefit its mild beer business where Foster’s has a market share of 6 per cent.

“We hope to increase our hold in the mild beer segment from 16 per cent to 22 per cent in the near future,” the official said. Foster’s India produces, distributes and supports the Lager, Amberro Mild and Amberro Strong beer brands in India.