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Up against a regulatory hurdle in the UK over the USD 2 billion takeover by global liquor giant Diageo, United Spirits' board today approved a plan to sell Whyte & Mackay Ltd (W&M), an indirect wholly-owned subsidiary of the company.
The board at its meeting today considered a potential sale of Whyte & Mackay Ltd.
"The board proposes to initiate a process, based on the outline timetable provided under UK law in connection with the decision of the Office of Fair Trading, to explore a potential sale of W&M," United Spirits Ltd (USL) said in a filing to the BSE.
"The board has nominated certain persons to oversee the process and consider, examine and evaluate possibilities and structures in relation to a potential sale, appoint necessary advisors in this regard and identify potential purchasers," it added.
The board will, after completion of the process, consider and decide upon any sale, the filing said.
In November last year, UK's fair trade watchdog found Diageo's deal to take over United Spirits to be anti-competitive, forcing the company to offer selling bulk of Whyte & Mackay business.
The Office of Fair Trading (OFT) had stated the merger may lead to a substantial lessening of competition in the supply of blended whisky to retailers.
The OFT would have a fresh look at the Diageo Plc-United Spirits Ltd deal in the wake of a new proposal made to sell bulk of Whyte & Mackay business to address the competition issues in the British whisky market.
In the UK, United Spirits' subsidiary, Whyte & Mackay, is primarily active in the supply of whisky, besides being a player in other spirits, including vodka.
In 2007, the then Vijay Mallya-led United Spirits had snapped up Whyte & Mackay for about 595 million pounds (then nearly Rs 5,000 crore). A leading distiller of Scotch whisky, Whyte & Mackay's brands include The Dalmore, Isle of Jura, Glayva, Fettercairn, Vladivar vodka and Whyte & Mackay blended Scotch.
Diageo, in 2012, had announced that it would pick up 53.4 per cent stake in United Spirits in a multi-structured deal for a total of Rs 11,166.5 crore. Instead, it could pick only 25.02 per cent stake for a total consideration of Rs 5,235.85 crore due to tepid response to open offer.