It takes a lot of talent to organize an M&A transaction in a brewery, and ING Barings has done it - and in India of all places.
It is the first transaction for the firm's 13 person corporate finance team, which it recently poached en masse from Bank of America, and is led by Sunil Gulati.
The deal sees ING Barings cementing its relationship with one of India's top corporates, United Breweries, which brews everyone's favourite accompaniment to prawn madras, Kingfisher beer.
United Breweries is in expansion mode. Already India's largest brewer, it recently sold a 26% stake in itself to the UK's Scottish & Newcastle, and formed a joint venture with which intends to acquire smaller brewers in India's many states.
This deal supports that strategy. United has bought GMR Breweries from Southern Indian conglomerate, GMR Technologies. The brewery is in Andhra Pradesh, the second biggest beer consuming state in India.
The Sri Kakulam brewery has a capacity of 0.12 million hectalitres, and has received government permission to double this production level. Significantly, by purchasing this asset, United is depriving its main rival, Shaw Wallace of capacity - since the Sri Kakulam brewery was making beer on its behalf.
India is drinking roughly 20% more beer each year, and one brewer that was also interested in bidding for this asset was South African Breweries. In the end, United paid Rs570 million ($11 million) for GMR Breweries.
Consolidation in the beer market is necessitated by geography. The market is fragmented by state regulations that prevent beer being produced in one state from being sold across the border in another. Beer must be produced in the same state in which it is sold. For all of us who assume free trade across borders is a given, India's beer business offers a sobering alternative reality.
This all cash deal is the first brewery acquisition in Andhra Pradesh, but given that beer consumption (per capita) is below China's and growth is strong, it seems that this will just be the start of an acquisition spree across India funded by the roughly $100 million that Scottish & Newcastle has injected into United.