Diageo-controlled United Spirits Ltd (USL) on Friday said it would sell Whyte & Mackay Group, a manufacturer of whisky, to the Philippines-based brandy manufacturer Emperador Inc for £430 million (Rs 4,345 crore). The board of USL, at a meeting here on Friday, decided to sell the entire issued share capital of Whyte & Mackay Group to Emperador UK, a subsidiary of Emperador, a unit of Alliance Global, the world’s largest maker of brandy. The Vijay Mallya-led USL had bought Whyte & Mackay in 2007 for £600 million. The share sale is subject to the conditions set out in a share sale and purchase agreement between United Spirits (Great Britain), Emperador UK and Emperador and an associated tax deed.
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I am delighted to be able to pass on Whyte & Mackay into the hands of a new owner, committed to realising the full potential of the business and whose vision for Whyte & Mackay is aligned with USL’s,” said Vijay Mallya, chairman of USL. United Spirits (Great Britain) has approved the sale and entered into the share sale and purchase agreement with Emperador UK and Emperador. Under the agreement, Emperador has agreed to supply whisky to USL for three years from the date of sale. Andrew Tan, chairman of Emperador, said, “Whisky is the second-fastest growing spirits segment in the world next to brandy. With this acquisition, Emperador will be exposed to two of the fastest-growing spirits segments in the world. The global demand for Scotch whisky has shown strong growth over recent years and is expected to continue this momentum. We are continuously looking to enhance shareholder value through earnings accretive investments.” “We believe Whyte & Mackay’s acquisition is in line with our plans to enhance our product portfolio. Whyte & Mackay has a global distribution in 50 countries.” Since Diageo bought a controlling 29 per cent stake in USL, the two had worked together on several issues. Diageo had voluntarily offered to sell a significant portion of Whyte & Makcay to allay competition concerns being probed by the UK's Office of Fair Trade. In addition, the sale is subject to necessary Indian and UK regulatory approvals and shareholder approvals, including those by the Reserve Bank of India, since the sale will result in a significant write-off of loan amounts recoverable by the company from its overseas subsidiary. Vijay Mallya-led USL had bought Whyte & Mackay in 2007 for close to 600 million pounds.