UPDATE 1-United Breweries to market Heineken in India-paper

(Adds UB Group's confirmation, share price)

MUMBAI, May 12 (Reuters) - India's largest beer maker, United Breweries (UB) (UBBW.BO), has reached a deal to bottle and distribute Heineken (HEIN.AS) brands in the country, the Economic Times reported on Tuesday.

UB, in which the Dutch brewer acquired a 37.5 percent holding last year, will also get a one-time fee of 3 billion rupees ($60.5 million) after settling differences over the role of Heineken in the Indian company, the newspaper said.

Heineken had got the UB holding following a takeover with Carlsberg CARb.CO of the Indian brewer's erstwhile partner, Scottish & Newcastle.

"We confirm that we are in dialogue with Heineken," a spokesman for the UB group told Reuters. He said there were no further comments ad an announcement would be made when appropriate.

The deal will see UB adding two premium beers, Heineken and Tiger, to its portfolio and will help it weather increasing competition from international beer makers, the paper said.

UB sells the popular Kingfisher brand and has more than half of the Indian beer market, which grew 10 percent in the last financial year.

The local operations of Asia Pacific Breweries (APBB.SI), Heineken's Singapore affiliate, is likely to be brought under the UB fold leading to a consolidation of the two companies' beer operations in India, the newspaper said.

"We don't comment on market speculation," the paper quoted a Heineken spokesperson as saying.

Shares in United Breweries, valued at $570 million, rose 5 percent to 122.55 rupees in a Mumbai market .BSESN that rose 4.1 percent. ($1=49.6 rupees) (Reporting by Janaki Krishnan; Editing by Ranjit Gangadharan)