Mallya buys Whyte & Mackay, will bring premium Scotch to India
May 16, 2007 - 3:25:30 PM
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Vivian Imerman will remain with the Whyte & Mackay group as a strategic advisor to the Chairman and Chief Executive, Vijay Mallya, who also owns Kingfisher Airline, one of the fastest growing airlines in India.
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By Prasun Sonwalkar, IANS,
[RxPG] London, May 16 -: Flamboyant Indian businessman Vijay Mallya said Wednesday that his company will immediately introduce into the Indian market premium brands of Whyte & Mackay, a spirits major that he acquired for 595 million pounds.
Speaking after announcing the takeover, Mallya, chairman of the United Spirits Ltd, the flagship of the United Breweries Group, said: 'We have a large and growing business in India and have made recent forays into Russia and China. United Spirits have created some of the world's largest brands of drinks.
'Until today, the only missing link in our portfolio has been Scotch and due to the shortages and rapidly increasing prices of Scotch Whisky, we needed a reliable supply source to secure our future considering that we use Scotch in our Indian blends.
'The potential for premium Scotch Whisky in India is enormous and, with the acquisition of Whyte & Mackay we now have a strong portfolio of internationally recognized brands that we will immediately introduce into the Indian market and use our strong distribution muscle fully to our advantage.
'In addition we now have access to international distribution and can look forward to exporting our brands from India'.
The takeover deal of Whyte & Mackay, one of the Britain's biggest drinks company, for a price of 595 million pounds, notches yet another milestone for the global spread of Indian enterprise.
The deal, announced at the Glasgow Hilton Hotel, is the latest of a spate of mega-takeover of British and European businesses by Indian entrepreneurs such as Ratan Tata - and Lakshmi Mittal -.
Whyte & Mackay owns brands including The Dalmore, Isle of Jura, Glayva, Fettercairn, Vladivar vodka and the eponymous Whyte & Mackay blended Scotch. The company also owns several other Scotch Whisky brands such as Mackinlays, John Barr, Cluny and Claymore amongst a host of others.
United Spirits sees significant revenue growth opportunities from its acquisition of Whyte & Mackay. In particular, the UB Group will provide access to India and other large emerging markets, allowing an acceleration of Whyte & Mackay's growth plans.
Whyte & Mackay recorded sales of 9 million case and case equivalents in the last 12 months. United Spirits recorded sales of 66 million cases for the year ended on March 31, 2007. With this acquisition, United Spirits will have consolidated sales of 75 million cases per annum.
At a time when global demand for Scotch Whisky is showing strong growth and prices are increasing rapidly, Whyte & Mackay's bulk scotch inventories of 115 million litres are not only very valuable but allow United Spirits the opportunity to meet their own growing requirements for their brands in India.
The Invergordon Distillery, near Inverness, is one of the largest Scotch Whisky distilleries with a capacity of producing 40 million litres of alcohol per annum. This production resource will provide United Spirits with a perennial source of Scotch Whisky to meet its global requirements in the future. In addition, Invergordon will remain a key strategic provider of bulk Scotch Whisky to industry majors.
Whyte & Mackay also owns four malt whisky distilleries in Scotland and a state of the art bottling facility in Grangemouth with a capacity of producing 12 million cases per annum.
Mallya added: 'Given the very valuable Scotch Whisky inventories and production assets, a significant part of the acquisition debt is in the target with no recourse to United Spirits. I have repeatedly stated that we will not over pay in any acquisition and I am satisfied that the price agreed is attractive.
'Further, the combined profits of United Spirits and Whyte & Mackay are expected to be earnings accretive from the first completed year of operations after accounting for the cost of funds applied to the acquisition.'
Vivian Imerman, chairman of Whyte & Mackay, said: 'With the UB Group's ability to sell and market brands, Whyte & Mackay will be taken to a new level again. This is now a great company and is going to a great home.
'The annual operating income of Whyte & Mackay is now approximately pound 50 million and I expect it to grow at the rate of 20 percent plus, per annum, for the foreseeable future while the revenue line has grown 30 percent in current year.
'Vijay is a world-class businessman with honour, integrity, flair and a great instinct for business. I look forward to working together with him to further build a premium international spirits business.'
Vivian Imerman will remain with the Whyte & Mackay group as a strategic advisor to the Chairman and Chief Executive, Vijay Mallya, who also owns Kingfisher Airline, one of the fastest growing airlines in India.
Acquisition finance for the transaction to United Spirits was arranged and provided by ICICI Bank and Citibank. United Spirits was advised by UBS, ICICI Bank and Standard Chartered. Whyte & Mackay was advised by Citigroup.
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