Heineken and UB Group fold differences

Differences between Heineken and UB Group over the 37% acquisition by the German brewer of Mallya's company have been resolved, and a way is being paved for the collaboration to be of mutual benefit.

Contentions arose from the Mallya camp, that Heineken, which has a JV with APB (Asia Pacific Breweries) and acquired Singapore's Fraser and Heave, and also through a global acquisition via Scottish and Newcastle acquired a part of UB,cannot be party to two JV's in India simultaneously.

Heineken has resolved the dispute by turning ABP into a wholly owned subsidiary company for 25 million euros which shall be transferred to UB in 2010. Efforts are being made to merge APB's beer brands with UB, which shall see two million crates being added to its production annually.

Heineken is to be launched in India in 2010 and plans to use the UB distribution network. India will see a substantial rise in beer consumption in the years to come for some time and UB owns 51% of this. Also, Kingfisher shall be promoted globally by Heineken.

By the agreement, Heineken may nominate 3 members of UB's Board. They have appointed the CFO and two non-executive directors to the same from their team of elite high officials.