30 July, 2008 - Drinks giant Diageo is in negotiations to buy a 30% share of Indian lager company Cobra Beer for between GBP25-30 million, according to UK sources.
Cobra’s majority shareholder Lord Karan Bilimoria is also reported to have held talks with other investors as he bids to inject capital into the business to fund expansion ambitions.
A deal with Diageo, a world leader in the industry, could see Cobra Beer attain global penetration thanks to the larger company’s extensive distribution network. One negotiator involved in the deal said an alliance with Diageo could take the UK company “a long way” as the US-based company has been expanding forcefully into emerging markets such as Asia and Africa.
However, said the source, it is not certain that the deal will go through.
Cobra was founded in 1989 for sale in the UK’s Indian curry restaurants but the company is now hoping to expand sales into pubs and clubs. It currently has annual sales of about GBP55 million.
Both Cobra and Diageo declined to comment.