UB may buy Scottish firm for $500 mn

UB group, the third largest spirit-maker after Diageo and Pernod, is likely to complete a $500 million acquisition in Scotland next year. The acquisition will put the group in the big league of premium whisky and scotch, the largest liquor segment in the world.

The acquisition is likely to be followed by the merger of Shaw Wallace & Company with group flagship United Spirits.

Speaking to mediapersons on the sidelines of the company's 60th annual general meeting, Ravi Nedungadi, CFO of UB group, said that UB was close to acquiring an outfit in Scotland though he did not make any comment on whether it was looking for Whyte & Mackey.

There had been speculation that UB might acquire Whyte & Mackey. "We are looking at one big acquisition, which will cost more than $500 million. This could be in the high-end whisky segment and hence Scotland is the natural choice," he said.

He indicated that the acquisition could go up to $1 billion. According to him, UB was looking for both brand and manufacturing facility overseas.

"We  are the only Indian company, which has the potential to be a world leader in this segment. So, we shall try to fulfill that dream," he added.

Nedungadi pointed out that the focus of the group would be on spirits. "India is not a big beer market so our focus will be on spirits," he added.

Commenting on SWC, he said that eventually, the entity would be merged with United Spirits over the next two years.

"We do not want to have too many legal entities as the service tax implications for such a structure is huge. Now, SWC only owns brands with only one manufacturing facility, so it is better to merge the outfit with United Spirits," he said.

The group CFO informed that the firm was now trying to sort out the tax litigation of SWC, after which it would be merged with United Spirits. Incidentally, SWC has already become a subsidiary of United Sprits after the merger of Phipson Distilleries with it.

PDL is the holding company of SWC.

Meanwhile, the group is looking for major investments in the eastern region. Nedungadi said that it would be setting up large greenfield distilleries. It is also looking at investment in the aviation sector.