LONDON: Indian-born Lord Karan Billimoria is attempting to convert his popular beer brand 'Cobra' into a 'world beer' with the help of Diageo, the world's biggest alcoholic drinks company and owner of Guinness and Johnnie Walker whisky.
Billimoria is likely to give away a 30 per cent stake of his world famous Cobra Beer to Diageo, and keeping his global objective in mind, he has hired a new chief executive, Adrian McKeon, from the spirits industry to create a new image for the beer.
If Diageo was to strike a deal with Cobra, it could push the brand through its global distribution networks alongside brands such as Guinness and Red Stripe.
"Diageo could take it a long way," said one person involved in the sale discussions. However, it still remains uncertain if Diageo will seal a deal with Cobra.
According to the Financial Times, the private Indian-themed lager company has put a price tag of between 25 million to 30 million pounds for the said stake.
Lord Bilimoria has also forecast that, within two years, Cobra will sell more beer in India than in the UK as alcohol consumption becomes more common among the country's growing middle class.
Although Diageo's heartland is in the US, the world's most profitable spirits market, it has recently been expanding more aggressively into emerging markets in Africa and Asia, including India.
Although the vast bulk of Diageo's sales are in spirits such as whisky and vodka, the company likes strong brands in any category and describes itself as a "total beverage alcohol" company.
It recently paid 457 million pounds for a 50 per cent stake in Dutch vodka brand Ketel after realising that it could not buy Sweden's Absolut vodka without running into antitrust problems.
Diageo's marketing team could also help Cobra develop its image as a "world beer". Cobra has found it hard to break into the UK pub and bar market, which accounts for just 10 per cent of its sales.
Cobra is brewed in Poland but it is shifting its brewing operations back to the UK in order to save money because of increasing transportation costs and the strengthening of the Polish zloty both against sterling and against the euro.
Cobra is also in talks with other interested parties.
Billimoria is likely to give away a 30 per cent stake of his world famous Cobra Beer to Diageo, and keeping his global objective in mind, he has hired a new chief executive, Adrian McKeon, from the spirits industry to create a new image for the beer.
If Diageo was to strike a deal with Cobra, it could push the brand through its global distribution networks alongside brands such as Guinness and Red Stripe.
"Diageo could take it a long way," said one person involved in the sale discussions. However, it still remains uncertain if Diageo will seal a deal with Cobra.
According to the Financial Times, the private Indian-themed lager company has put a price tag of between 25 million to 30 million pounds for the said stake.
Lord Bilimoria has also forecast that, within two years, Cobra will sell more beer in India than in the UK as alcohol consumption becomes more common among the country's growing middle class.
Although Diageo's heartland is in the US, the world's most profitable spirits market, it has recently been expanding more aggressively into emerging markets in Africa and Asia, including India.
Although the vast bulk of Diageo's sales are in spirits such as whisky and vodka, the company likes strong brands in any category and describes itself as a "total beverage alcohol" company.
It recently paid 457 million pounds for a 50 per cent stake in Dutch vodka brand Ketel after realising that it could not buy Sweden's Absolut vodka without running into antitrust problems.
Diageo's marketing team could also help Cobra develop its image as a "world beer". Cobra has found it hard to break into the UK pub and bar market, which accounts for just 10 per cent of its sales.
Cobra is brewed in Poland but it is shifting its brewing operations back to the UK in order to save money because of increasing transportation costs and the strengthening of the Polish zloty both against sterling and against the euro.
Cobra is also in talks with other interested parties.
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