UB group, the largest player in the domestic alcoholic spirits and beer industry, is close to acquiring Scotland-based distiller Whyte & Mackay. The deal size is speculated to be in the region of Rs 4,300 crore, which would make it the largest overseas acquisition so far by an Indian company. The acquisition is likely to be routed through group company United Spirits.
Whyte & Mackay is one of the better known distillers in Scotland with a history of more than 160 years. The company has close to 10 per cent of the global scotch whiskey market with established brands like its flagship Whyte & Mackay whiskey and Dalmore single malt whiskey. The company also owns the vodka brand Vladivar. The company is not profitable as whiskey prices have come down substantially in recent years.
Whyte & Mackay is now owned by South African entrepreneur Vivian Imerman, who gained control last year by buying out German bank West LB, along with Iranian investor Robert Tchenguiz. UB group was engaged in protracted negotiations with the current owners for the last few months, but the deal got delayed because of disagreements over valuations.
"We are working on various options with Whyte & Mackay and all of you will hear the news one fine day", United Spirits managing director Vijay Rekhi was quoted in a Scottish newspaper. "Yes, the talks are on. The company is looking at the acquisition by January end", Forbes magazine quoted a UB group spokesman
UB group had earlier backed out of some large overseas acquisitions as they became too expensive after competitive bidding. UB had bid for French champagne major Tattinger before withdrawing also on resistance from employees of Tattinger and French politicians. The group had also reportedly bid for the Indian and Vietnamese operations of Australian beer giant Fosters, but backed out eventually.
The only overseas acquisition so far by the group is a small French wine company, Bouvet-Ladubay, which was earlier a part of Tattinger.
United Spirits, the flagship company of the UB Group, was formed by the merger of McDowell, Shaw Wallace and other smaller companies. The group acquired Shaw Wallace, then the second largest alcoholic spirits company after McDowell, from the Jumbo group for around Rs 1,550 crore in 2005.
UB is the world's third largest liquor group in volume sales after Diageo and Pernord Ricard, but its business is mostly limited to the domestic market. The main competitors of UB in the domestic market are multinational players like Seagram. The group is also the market leader in the beer business, where it has a joint venture with Scottish & Newcastle.