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Mallya bottles Shaw Wallace

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  • Published 21.03.05

Mumbai, March 21: Swashbuckling liquor baron Vijay Mallya finally got what he wanted some 20 years back ? Shaw Wallace.

McDowell & Company, the flagship of the United Breweries Group, today inked a deal with Jumbo World Holdings Limited (JWHL) in Dubai to acquire Shaw Wallace & Co Limited.

The acquisition will catapult the UB Group to the second place among global spirits companies with annual sales of approximately 60 million cases, a distant second to world leader Diageo.

The deal, for which Mallya will have to shell out Rs 1300 crore ($300 million), will give the UB group head an indirect control of up to 54.54 per cent of Shaw Wallace.

In the early 1980s, Mallya joined hands with friend-turned-foe Manu Chhabria to bid for the professionally-run Shaw Wallace in one of India?s most high-voltage corporate battles.

Mallya, however, was forced to stay in the shadows because of the tight currency regulations back then, dealing his hand instead through Chhabria, a non-resident Indian. Chhabria took over Shaw Wallace, shrugged off Mallya?s claim and triggered one of the most enduring corporate rivalries India has seen.

Late last year, Mallya had uncorked a Rs 1,251-crore bid in response to the Chhabria family?s sale offer for Shaw Wallace?s distillery division. Reports, however, suggested that his bid did not go down well with many in the Chhabria family.

Sensing that his offer was not welcome, Mallya stunned all in February with an open offer for 25 per cent of Shaw Wallace valued at Rs 300 crore. The move was seen by observers as a pressure tactics to force Manu Chhabria?s family to sell the liquor company to him.

Mallya, who is a member of the Rajya Sabha, was in no mood to hear a negative response from the Chhabria family. He had been camping in Dubai for the past one week to iron out the nitty-gritty of the deal.

Mallya is believed to have successfully changed the stance of Vidya Chhabria, wife of late Manu Chhabria, and got himself in the reckoning finally. This is evident from the press statement, which has the signatures of both Vidya Chhabria and Vijay Mallya.

At a recent tele-conference from New York, Mallya had made it very clear that he would talk only to Vidya Chhabria and not the three daughters.

Very recently, Komal Chhabria, Vidya?s second daughter, who is hands on with SWC also fell in line. People close to her said she was amenable to a sale at the right price.

Pursuant to the proposed acquisition, McDowell and the parties even proposed to revise the open offer for shares of SWC to reflect a change of control.

The agreed purchase price imputes a value of Rs 325 per SWC share which includes a fee for worldwide non-compete undertakings.

Shaw Wallace will bring brands like Royal Challenge (premium whisky), Director?s Special (regular) and Antiquity (a super premium whisky) label into the UB stable.

McDowell shares today gained 5 per cent from its Friday closing of Rs 239.65 at Rs 251.60, while Shaw Wallace jumped 6 per cent, from Rs 217.85 to Rs 230.95. The open offer at Rs 260 would mean that Mallya's company would cough up a 12 percent premium to the ruling market price.