SABMiller, M&S in final push for MM's beer biz

BANGALORE: The race for Mohan Meakin’s beer business has narrowed down to two contenders, SABMiller and Ramesh Vangal’s Mason & Summers. The prolonged bidding process, which attracted many global brewers, could culminate as early as next week with the promoter family deciding on a preferred suitor.

MML is offering to dilute 51% stake in brewing operations, which will be spun off into a separate joint venture. PwC, managing the process, is expected to make a final presentation to the MML board by the end of this month, following which, the Brigadiar Kapil Mohan led family would take a call on the potential partner.

It is learnt that the family would prefer a partner with which it could work, apart from maximising the value. Informed sources said MML’s beer assets could attract an enterprise valuation of Rs 400/450 crore, and a potential partner might throw up between Rs 230/250 crore for the 51% stake and management control.

However, according to sources, the fate of the bidders is hanging in balance and the outcome will depend largely on the power play between a section of the Mohan family and its key associates managing a significant part of the alcoholic beverage operations.

Besides brands like Golden Eagle and Black Knight, MML’s brewing operations include plants located in Himachal Pradesh, Uttar Pradesh, Maharashtra, Andhra Pradesh and Tamil Nadu. A long standing associate, M Nandagopal, controls or owns the plants in the bigger markets like Andhra Pradesh and Tamil Nadu, and these two breweries alone are likely to attract a valuation of Rs 250/300 crore.

In context, the deal making would require consensus between the promoter family and associates, and the lack of which could further delay the already prolonged transaction. Sources said global brewers like Carlsberg, Anheuser-Busch, InBev and Heineken had looked at the deal in the early stages but seem to have walked out, citing different reasons.