Heineken NV is seeking to raise its stake in India’s largest brewer, United Breweries Ltd, to gain full management control as it bets on the country’s growing thirst for beer.

Dutch brewer Heineken is the single-largest shareholder in United Breweries, maker of Kingfisher beer, with a 42.07 per cent stake.

It now plans to take that holding beyond 50 per cent by buying shares from indebted liquor baron Vijay Mallya.

The stake increase – a bet on one of the world’s fastest growing beer markets by the world’s third-largest brewer – will be completed in phases over the next couple of years, said two sources, who declined to be named as the talks are private.

At United Breweries’ current market price, the deal could be worth as much as $1.06 billion if the brewer takes on the full 32.6 percent share held by Mallya and related companies.

Sources said it was too soon to say if Mallya would retain a minority stake in United Breweries, if and when the planned Heineken share increase is completed.

A spokeswoman for Heineken declined to comment.

A spokesman for UB Group, Mallya’s group holding company, said there had been no discussions on a stake sale.

Heineken indirectly acquired a 37.5 per cent stake in United Breweries following its takeover of Scottish & Newcastle in January, 2008. It subsequently raised the stake by buying shares in the open market.

India’s beer market is growing significantly faster than the world average, largely because it is still very small. Indians consume on average about 2 litres of beer a year, compared with 18 litres in Asia and 57 litres in western Europe.

Two-thirds of Indians don’t drink alcohol at all, often for religious or cultural reasons, but rapid urbanisation and a fast-growing middle class are changing consumption habits, making India an attractive market for global brewers.

– (Reuters)