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Business News/ Companies / News/  United Spirits in talks to sell Whyte and Mackay to Malaysia’s Emperador
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United Spirits in talks to sell Whyte and Mackay to Malaysia’s Emperador

The transaction may value Whyte & Mackay at about 400 million

Emperador is in ongoing discussions with United Spirits and no agreement has yet been reached, the Philippine company said in a stock exchange filing on Monday. Photo: AFPPremium
Emperador is in ongoing discussions with United Spirits and no agreement has yet been reached, the Philippine company said in a stock exchange filing on Monday. Photo: AFP

Manila: United Spirits Ltd, controlled by the world’s largest distiller, is holding talks with Philippines’ Emperador Inc. to sell the Whyte & Mackay spirits business.

Emperador, a brandy maker that gets almost all its revenue from the Philippines, confirmed on Monday that it’s in talks to buy the Scottish spirits company to expand outside its home market.

Diageo had acquired Whyte & Mackay last year when it purchased a controlling interest in its Indian parent, United Spirits.

Diageo subsequently offered to sell most of the business to assuage concerns by the UK Office of Fair Trading that the takeover could lead to higher prices in the UK for blended whiskey.

Diageo’s proposal to the UK regulator included the disposal of Jura malt whisky and all its blended brands, including Whyte & Mackay and whiskies it sells to retailers to bottle under their own labels, the regulator said in November. The Dalmore and Tamnavulin malt distilleries would be retained, it said.

The purchase of Whyte & Mackay could move Manila-based Emperador closer to its goal of having a 33% share of the global brandy market in four years. Its announcement comes after a Bloomberg News story last week saying the talks are at an advanced stage though they could still fall apart over valuation, according to people familiar with the process.

“We confirm that Emperador Inc. is in ongoing discussions," the Philippine company said in a filing. “No agreement has yet been reached in this regard and Emperador is constantly on the look-out for opportunities to expand its liquor business both domestically and globally."

This acquisition is not necessarily positive because Emperador will be entering a market that’s different from what it is used to in the Philippines, said James Lago, head of research at PCCI Securities Brokers Corp. in Manila.

The products of Whyte & Mackay may not also be a big hit in the Philippines.

The transaction may value closely held Whyte & Mackay at about £400 million ($675 million), the people familiar said on 2 May, without providing a basis for the valuation.

That figure is similar to Emperador’s 2013 sales, which rose 27% to 29.86 billion pesos ($672 million), according to its annual report.

The stock’s behaviour is an indication that some investors are not receptive to the transaction because they find the valuation a bit expensive, PCCI Securities’ Lago said.

United Spirits had bought Whyte & Mackay for £595 million in 2007.

Emperador markets brandy under its own name and said it accounts for seven of 10 liquor bottles sold in Manila.

As part of its international ambition, the company bought Spanish brandy company San Bruno SA. It also purchased vineyard land in Madrid and is expanding brandy production there. Bloomberg

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Published: 05 May 2014, 02:03 PM IST
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