The Telegraph
Saturday , May 10 , 2014
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USL sells Whyte & Mackay

Mumbai, May 9: Vijay Mallya’s United Spirits Ltd (USL) will sell its scotch whisky unit Whyte & Mackay to Philippines-based Emperador Inc at an enterprise value of 430 million (Rs 4,360 crore).

The sale will help USL to clear a regulatory hurdle following its acquisition by Diageo Plc.

United Spirits had bought Whyte & Mackay in 2007 for around 595 million (Rs 5,000 crore).

Though it may seem that USL is selling Whyte & Mackay at a lower price than the acquisition cost, the company has not made any loss as Emperador has taken up the debts of the whisky maker.

Moreover, it is not clear if the sale comprises all the brands and distilleries of Whyte & Mackay.

United had to sell Whyte & Mackay after world whisky leader Diageo Plc took a controlling stake in the company. Britain's competition authority said Diageo's Bell's brand competes with Whyte & Mackay's whisky and that the combination could stifle competition.

In a communication to the stock exchanges today, USL said its board had recommended that its indirectly owned subsidiary United Spirits (Great Britain) Ltd consider the sale of Whyte & Mackay Group to Emperador UK Ltd, a unit of Emperador Inc, “for an enterprise value of 430 million”.

“United Spirits (Great Britain) has approved the sale and entered into the sale-and-purchase agreement with Emperador UK and Emperador Inc,” it added.

USL said that the sale of Whyte & Mackay would be subject to regulatory approvals in India and the UK as United Spirits will write off a significant amount of loans given to the UK arm. The company did not provide further details on this.

A distiller of Scotch whisky, Whyte & Mackay’s brands include The Dalmore, Isle of Jura, Glayva, Fettercairn, Vladivar vodka and Whyte & Mackay blended Scotch.

USL was also silent on whether the sale will include all the brands and distilleries of Whyte & Mackay.

It was speculated that the sale would exclude the Dalmore and Tamnavulin malt distilleries.

“I am delighted to be able to pass on Whyte and Mackay into the hands of a new owner who is committed to realising the full potential of the business and whose vision for Whyte and Mackay is aligned with that of USL,” United Spirits chairman Mallya said.

“Whyte and Mackay is a prized asset with excellent growth opportunity and it’s acquisition is in line with our plans to enhance our product portfolio,” Emperador chairman Andrew Tan said.