Heineken declined to comment in Amsterdam. In St. Petersburg, its Russian division's vice president, Viktor Pyatko, said: "For the time being, there is no deal."
Kommersant, quoting sources at both companies, said the two firms planned to sign a deal later on Tuesday.
Russia is the world's fifth-biggest beer market -- after China, the United States, Germany and Brazil -- and the top beer makers are racing to expand in the country.
Moscow-based Taranov, Russia's seventh-biggest brewer, has three breweries spread across Russia and nationwide beer distribution. It made earnings before interest, tax, depreciation and amortization of $30 million in 2004. Analysts forecast that it will post EBITDA of $40 million in 2005.
Analyst Alexei Krivoshapko at United Financial Group brokerage said a $560 million price tag would value the brewer at $140 per hectoliter given a brewing capacity of 4 million hectoliters a year, which he said was expensive. He added that no outside buyer had yet paid more than $100 per hectoliter for a Russian brewer.
Taranov is the brewer of Pit and Three Bears beers. Its brands include Konigsberg and Doctor Diesel, and it also brews licensed brands such as Bavaria and Coors, giving it a 4.4 percent share of the Russian beer market by volume and about 4.5 percent by value.
Taranov is 62 percent owned by Allied Partners, run by Russian entrepreneurs Eugene Kashper and Alexander Lipshifts, and 38 percent by U.S. private equity group Texas Pacific.
Lehman Brothers and Renaissance Capital were brought in to advise the group on its options and had concluded that a sale was the best option, market sources said.
Kommersant said owners of the company appraised its assets at $560 million, above an estimate of $400 million to $440 million by UralSib analyst Marat Ibragimov. It quoted a source at Heineken as saying that the location of the breweries was attractive, giving the company production resources in regions where it had trouble competing before.
Kommersant said the deal would help Heineken catch up with its main foreign rival in Russia, Belgian-based InBev, the world's biggest brewer.
If completed, this would be the second-largest transaction in the Russian brewery industry, after InBev's buyout of SUN, analysts at United Financial Group said.
Renaissance Capital analysts estimated that the deal would push up Heineken's market share in Russia to 15 percent. Heineken has agreed to buy St. Petersburg brewer Stepan Razin after buying the Patra brewery in the Urals in May.
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