The board of directors of liquor major United Spirits has approved the sale and franchise of 32 popular brands in its portfolio to Inbrew Beverages for an estimated Rs 820 crore.
The decision to sell follows a strategic review initiated by USL for its popular brands which explored various options, including divestment. USL will continue to focus on ‘prestige and above’ brands as well as international brands in its fold in a bid to improve margins.
The company in a statement said the transaction will not include the McDowell’s or Director’s Special brands, which will be retained by USL. However, brands such as Haywards, Old Tavern, White-Mischief, Honey Bee, Green Label and Romanov will be part of the transaction.
“The sale portfolio covers the entire business undertaking associated with the 32 brands, including the related contracts, permits, intellectual property rights, associated employees, and a manufacturing facility. In addition to the above, USL and Inbrew have entered into a 5-year franchise arrangement for 11 other brands, including Bagpiper,” USL said in the statement.
“The transaction reflects the continued evolution of the management of the ‘popular’ portfolio since 2016, when the company moved to a franchise model in many states, to enable a sharpened focus on ‘prestige and above’. This is a significant move to reshape our portfolio in service of our publicly stated mission to deliver sustained double digit profitable top-line growth,” said Hina Nagarajan, managing director & CEO, of USL.
“The acquisition of these iconic brands provides Inbrew with a unique platform to extend its ambition of becoming India’s trusted household beverage company.
“These brands have delighted consumers over generations, and we are excited at the prospect of strengthening this legacy. Inbrew will revitalise these brands through expanded distribution, innovation and investments,” said Ravi Deol, chairman of Inbrew.
Inbrew has already acquired the Indian business of alcobev company Molson Coors, thus acquiring a licence for popular beer brands such as Miller, Carling, Blue Moon and Cobra. “After the acquisition of Molson Coors’ beer business last year, we will now participate in the mainstream spirits category, making Inbrew India’s diverse AlcoBev player,” Deol said.
USL said that it expects to complete the transaction by the end of the quarter ending 30 September 2022.