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UB jettisons Inertia-Alcobev merger move

Reeba Zachariah

The UB group has decided on a change in its earlier recast of beer operations. The group has dropped plans to merge Inertia Industries, in which the group recently acquired 51 per cent stake, with Millennium Alcobev, the beer company set up by the group and former Shaw Wallace managing director Ravi Jain.

According to the new plan, Millennium Alcobev will now be transferring its beer brands, human resources and assets to Inertia Industries, and hence remain just a shell company. The transfer to Inertia will be completed within two months, and Inertia will be renamed Millennium Alcobev.

With this transfer, the UB group will hold 34 per cent stake in the new company, 17 per cent stake will be held by Ravi Jain, 13 per cent by the ESOP Trust, while, Sunil Tandon, the former promoter of Inertia, and his family will hold around 4 per cent and the balance 32 per cent will be with the public.

Ravi Jain, vice-chairman & managing director of Millennium Alcobev said: "We have decided not to merge Inertia with the company because of the complicated procedure and the requirement of court approval. Instead of this, we have now decided to transfer the assets and manufacturing contracts to Inertia."

"The new company will be a stand alone company and will add value to the UB group as well as our dependence on them will be reduced to nil by 2002," Jain added.

Millennium Alcobev was formed in late 1999, with the UB group holding 51 per cent of the equity, Ravi Jain 26 per cent, 10 per cent with employees, while the balance 13 per cent is held by distributors.

The acquisition brought into its fold two more beer brands, Sandpiper and Turbo, along with Inertia's brewing capacities in Aurangabad (Maharashtra) and Daru Hera (Haryana). The company has recently relaunched Sandpiper and has changed its image in terms of a new logo and packaging giving it a young, trendy and modern look. Sandpiper is positioned and priced at par against UB group's flagship brand Kingfisher.

Millennium Alcobev has five brands from the UB stable which includes Bullet, Charger, Kalyani Black Label Strong, Flying Horse and Sun Lager with an option to buy them. It also acquired the rights to market the brand Guru of Mohan Goldwater and its own brand Zingaro.

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