Sun Brewing

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9-207-039

REV: JUNE 28, 2010

BELÉN VILLALONGA

RAPHAEL AMIT

SUN Brewing (B)

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In late July 2004, Nand Khemka and his sons Shiv and Uday assembled in Paris to discuss their

holdings in SUN Interbrew Limited (SIL), a leading Russian beer producer. SIL was a joint venture

formed in April 1999 between their beer company SUN Brewing and Belgian beer giant Interbrew.1

SUN Brewing was part of SUN Group (SUN), an international commercial and investment group

owned by the Khemka family. SUN’s shareholders were firm believers in the long-term growth

potential of the Russian beer market and in the value creation potential of SIL. The family was

extremely pleased with the recent success of the management team led by Joe Strella and felt they

shared a common vision with the shareholders and management of Interbrew.

However, the last few months had led SUN to consider carefully the situation in which they found

themselves. First, the Alfa Group, a large financial and industrial conglomerate in Russia, had

accumulated 15.8% of the voting stock in SIL, thereby becoming the third largest voting shareholder

in the company.2 Alfa had approached both Interbrew and SUN separately and had expressed their

desire to buy out SUN’s interest and to become a partner with Interbrew in the future growth of the

business. SUN had also been approached by Interbrew about buying SUN’s stake.

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Although the family was keen to remain a long-term shareholder in the business, the present

situation required careful evaluation. Alfa Group’s announced intention to take part in managing SIL

and pursue a leading role in the Russian beer industry created a potential new dynamic. How could

the family remain a long term shareholder, maintain exposure to the growth of the Russian market,

retain joint control of SUN Interbrew and yet deal with the presence of a strong new shareholder who

would want to exert significant influence on the future of the business?

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The family also reflected on...