UK's Molson Coors, one of the top brewers in the world by volume, has bought out Cobra Beer, in a joint venture deal with its NRI-founder Karan Bilimoria, Molson Coors said in a website release.

Molson Coors and Cobra Beer have set up a joint venture, Cobra Beer Partnership Ltd, and has appointed PricewaterhouseCoopers, the accountant, as administrators.

Molson will get 50.1 per cent stake in the debt-free joint venture against a £14 million payoff to secured creditors of Cobra Beer that Lord Bilimoria tried to sell last year for around £200 million.

The joint venture, Cobra Beer Partnership Ltd, will own the world rights to Cobra - with the exception of the Indian sub-continent area – and will be managed by Molson Coors (UK).

The joint venture deal secures the future of the Cobra brand and its employees and ensures continuity of supply to customers, the release said.

Cobra founder Lord Karan Bilimoria will chair the joint venture board made up primarily of Molson Coors executives. Adrian Davey, formerly MD of Molson Coors Off-trade, has been appointed managing director of Cobra Beer Partnership Ltd.

Reports suggest Cobra Beer racked up losses of about £16 million last year and the company ran into further financial difficulties in the wake of the financial market meltdown.

Cobra seems to have opted for a `pre-pack' with the buyers before appointing the administrator and, according to PwC, this was the best option for Cobra.

A pre-pack is when a sale is agreed before the administrator is appointed and is carried out without the business being offered on the open market.

Karan Bilimoria, a Cambridge law graduate and qualified chartered accountant had founded Cobra Beer along with Arjun Reddy in 1989, brewing the first batch of  Cobra at Mysore Breweries in Bengaluru in 1990, and exported to the the UK for seven years.

In 1997 Cobra was brewed in the UK under licence with Charles Wells, now known as Wells & Young's, positioned as an 'exotic, less gassy beer', Cobra has grown into a 200,000 barrel brand, distributed in more than 40 countries, and stocked by the majority of ethnic restaurants in the UK.

Cobra Beer has also signed a number of licencing agreements with breweries in India.

In April 2004, Cobra Beer tied up with the Mount Shivalik Group, the largest independent Indian brewer, to brew Cobra under licence for the domestic market and invested Rs4.6 crore in upgrading one of Mount Shivalik's breweries in Rajasthan.

In January 2008, Cobra Beer acquired a 76 per cent stake in Bihar-based brewery, Iceberg Industries Ltd.

Cobra is sold in 6,000 restaurants in the UK and is currently one of the country's fastest growing 'world beer' brands. Cobra has been on an aggressive expansion plan over the past two years, but the business model could not be sustained in the current economic environment and Cobra was put up for sale in late 2008.

Molson Coors (UK) and Cobra chairman, Lord Karan Bilimoria had been in talks with the company's key creditors in pursuit of joint venture solutions that would preserve the Cobra brand and maximise the return to creditors, the release said.

Cobra has has financed its growth by rolling over debts at increasingly high interest levels and that appears to have led to its demise.

Large numbers of Cobra staff has also been made redundant in recent weeks in preparation for the sale of the brand. Cobra has consulted its employees and a joint venture integration team is in place to manage transition, it added.

''As a brand-builder, we are looking forward to welcoming Cobra into our global brewing family and creating a new chapter in Cobra's history. Cobra is an excellent fit with our UK portfolio - alongside international brands such as Grolsch, Blue Moon and Sol – and builds our commitment to offer customers an outstanding range of beers to pair with food,'' said Mark Hunter, CEO of Molson Coors (UK), adding, ''The immediate business priorities are to ensure a smooth transition and continuity for Cobra's customers, while we integrate the Cobra brand and many of its people into our organisation.''

''I am pleased to have reached this agreement with Molson Coors, which is the best option to ensure continuity of supply for Cobra customers and security of employment for some Cobra employees. Molson Coors is a highly successful international brewer with a tremendous track record in brand development and their unique and positive culture is shaped by generations of family ownership. These factors were tremendously important to us in deciding who we would partner with and I look forward to working with them in the future,'' added Lord Bilimoria, founder of Cobra Beer and chairman of The Cobra Beer Partnership Ltd.

The Cobra Beer Partnership Ltd will own the world rights to Cobra with the exception of India, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.

With a portfolio that includes Carling, the UK's best selling lager for three decades, Coors Light, Grolsch, Worthington's, Caffrey's, Sol and a range of speciality beers, Molson Coors (UK) has a market share of over 20 per cent of the UK beer market. Molson Coors operates breweries in Burton on Trent, Alton and Tadcaster and employs over 2,000.

Cobra is one of the UK's fastest growing premium beer brands, with the largest average annual retail sales growth of 40 per cent per annum and is now one of the strongest and best known brands in the world beer category in the UK. Cobra Beer has been exported to over 50 countries around the world.