Heineken pours manageable froth on India tipple

Heineken is downing a long overdue pint in India by taking majority control of United Breweries. With the target’s stock near all-times highs, topping up its stake to 61.5 per cent from 46.5 per cent was not cheap; the additional shares are worth almost $800 million. But the froth is worth it.

The drinks giant is effectively buying shares seized by lenders from disgraced tycoon and one-time quasi-partner Vijay Mallya, who is fighting India’s attempt to extradite him from the United Kingdom. As a result, regulators exempted Heineken from making a mandatory offer for the rest. It is recognition that the Dutch brewer already calls the shots, but also of official interest in helping state-controlled banks clean up their books.

The waiver takes edge off. Before the pandemic diluted sales, United Breweries generated half the net profit margin of its foreign parent. As conditions improve, India’s beer market will grow faster than the global average. That is worth raising a glass.