United Breweries and Heineken NV, a Dutch beverages company, has finally put-off a dispute running for the last one year. Under the new shareholder agreement, UB will brew and market Heineken brands in India, which is one of the world's fastest-growing beer markets. In turn, Heineken will distribute UB's Kingfisher brands globally.

Under an arrangement, Heineken will takeover Asia Pacific Breweries (APB) India and then will transfer the company's rights to UB in the year 2010. As a result of this, both the companies will withdraw their litigations against each other. Investors showed keen interest in UB's shares, which helped the shares to surge by 4.7% on the BSE to close at Rs. 191.50, on Monday.

Heineken, which is the world's third-largest brewer, has a 37.5% stake in UB, and Mr. Vijay Mallya and his associates have a matching shareholding in UB. The remaining 25% stake is held by the public. Heineken acquired this stake after it bought Scottish & Newcastle, which has been UB's long-time partner, jointly with Carlsberg AS in January 2008.

UB, seeking termination of the special rights and privileges granted to Scottish & Newcastle, had filed a suit in the Bombay High Court in the last year, as there was a conflict of interest between the two companies. Heineken has a stake in Singapore-based APB, which markets the well-known Tiger beer brand in India, which has been in direct competition with UB's Kingfisher brand.

Heineken will acquire APB's existing Indian investments including, Asia Pacific Breweries Pte Ltd and Asia Pacific Breweries-Pearl Pte Ltd, for the equity shares of worth 25 million euros.

While Commenting on this agreement, Mr. Mallya said, "Heineken is among the most respected and recognized names among beers all over the world. The combination should help UB to further its leadership position in the years to come."

Heinkenen, which will get positioned under the super premium category, is expected to be launched in India, in the summer of the year 2010. Heinkenen sales will get benefit from the distribution network of the UB. In the Indian beer market, of which the UB group holds the 51%, sales increased by 10% to reach 174 million cases in the year 2008-09.