Under the terms of the agreement, Molson Coors will purchase a controlling stake of Cobra India from the existing shareholders and will have operational control over the new Molson Coors Cobra India.
The joint venture will be chaired by Lord Karan Bilimoria, Cobra’s founder and chairman of the Cobra Beer Partnership in the UK. Molson Coors will also be investing additional capital in Molson Coors Cobra India to meet the working capital requirements and the future expansion plans of the brewery operations. The total investment by Molson Coors is approximately $35m.
The capacity of the Indian brewing industry year ending March 2011 was just under 27m hl, and it has a per capita consumption of just under 1.5 litres. The Indian beer market is growing at 12% CAGR and is estimated to grow to 50m hl by 2020, putting it in the top 10 beer markets globally.
The deal with Cobra India includes land, a 175,000 hl brewery in Bihar State, with potential to expand to 500,000 hl, and a beer portfolio consisting of Cobra Premium, King Cobra Superior and Iceberg 9000.
In 2009, Molson Coors UK and Cobra Beer established a similar joint venture, the Cobra Beer Partnership Ltd, which secured world rights for the iconic beer outside of South Asia.
Source: Molson Coors Brewing Company
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