Mumbai: Around 60% of the £500 million (Rs4,200 crore) that United Spirits Ltd, the liquor business arm of India’s largest spirits company UB Group, is likely to pay for acquiring Scotch whisky maker Whyte & Mackay Ltd in the first week of May will be for the Glasgow-based distiller’s vintage Scotch whisky inventory.
Vintage stock is whisky that is distilled and kept for maturing for over five to 60 years in flavoured wooden barrels and typical oakwood casks. The higher vintage products are often sold at high premiums and and at high-profile auctions.
“Both companies have now reached a mutually agreed total valuation of around £500 million, which includes the vintage inventory, the value of currently sold brands and the company’s distilleries located in Scotland and other parts of Europe,” said a person familiar with the ongoing negotiations.
According to another merchant-banking executive, who is also familiar with the situation but did not want his named used, Whyte & Mackay’s inventory of vintage Scotch whisky alone has been valued at £300 million. “UB Group has already tied up with financial institutions for funding the deal,” he added.
Once complete, UB’s acquisition of Whyte & Mackay will be the largest cross-border deal in India’s liquor industry and one of the largest overseas acquisitions in the country. United Spirits has been in talks with the UK distiller for several months to try and fill a significant gap in its portfolio.
Founded in Glasgow in 1844 by James Whyte and Charles Mackay, the company is currently one of the largest whisky manufacturers in the world. Its key brands include a range of blended Scotch whiskies, Dalmore single malt whisky, Isle of Jura single malt whisky and Vladivar vodka.
Last year, UB Group, currently the third-largest spirits company in the world, was in the race for Champagne Taittinger, the world’s sixth-largest champagne company based in France. However, the Indian company lost the bid to Credit Agricole Group, France’s foremost banking group and also one of the world’s largest banks by shareholders’ equity. It bought the company for $751 million. UB Group later acquired Bouvet Ladubay SAS, a French wine company for €14.75 million (Rs84 crore).