New Delhi: Competition watchdog CCI has cleared the proposed merger of Scottish & Newcastle India (SNIPL) with Vijay Mallya-led United Breweries (UBL).
After the merger, SNIPL, which holds 3.22 percent shares in UBL, would cease to exist.
According to the scheme of amalgamation, over 84.89 lakh fully paid equity shares of UBL of Re 1 would be issued for over 3.22 crore fully-paid equity shares of SNIPL of Rs 10 each.
While UBL's primary business is to produce, package, distribute, market and sell beer in India and abroad, SNIPL at present has no operations.
"Considering the facts on record and the details provided in the notice...and the assessment of the proposed combinations is not likely to have an appreciable adverse effect on competition in India and therefore, the Commission hereby approves the proposed combination under sub-section (1) of Section 31 of the Act," the Competition Commission of India (CCI) said in its order.
In its notice, UBL said that the objective of the proposed combination was to consolidate Heineken Group's shareholding in UBL, which would lead to consolidation of Heineken Groups's presence in India.
At present, the Heineken Group and the UB Group separately hold 37.38 per cent each in UBL, and the remaining 25.24 percent is held by others.
CCI noted that "the aggregate of shares held by UB Group, Heineken and its shareholders in UBL, directly and or indirectly, before and after the proposed combination is not likely to give rise to any adverse competitive concern in India".
In January 2008, Heineken had indirectly acquired a 37.5 percent stake in UBL following its worldwide takeover of Scottish & Newcastle (S&N).
First Published: Sunday, March 25, 2012, 13:31