United Spirits to sell 32 liquor brands to Ravi Deol's Inbrew for Rs 820 cr

USL will retain McDowell's and Director's Special whiskey as it gives up labels like White-Mischief vodka and Honey Bee brandy.

United Spirits (USL), a subsidiary of British beverage and alcohol firm Diageo, is selling its portfolio of 32 brands to Inbrew Breweries Private Ltd for Rs 820 crore. Inbrew is owned by Indian entrepreneur Ravi Deol.

USL will retain the McDowell’s and Director’s Special whiskey brands. The 32 brands sold include Haywards, Old Tavern, White-Mischief, Honey Bee, Green Label and Romanov. USL and Inbrew have entered into a five-year franchise arrangement for 11 other brands. USL has granted Inbrew the right to convert the fixed-term franchise arrangement into one with perpetual rights.

“The transaction reflects the continued evolution of the management of the Popular (sic) portfolio since 2016, when the company moved to a franchise model in many states, to enable a sharpened focus on ‘Prestige & Above’. This is a significant move to reshape our portfolio in service of our publicly stated mission to deliver sustained double digit profitable top-line growth,” said Hina Nagarajan, Managing Director and chief executive officer of USL.

“The acquisition of these iconic brands provides Inbrew with a unique platform to extend its ambition of becoming India’s trusted household beverage company. These brands have delighted consumers over generations, and we are excited at the prospect of strengthening this legacy. Inbrew will revitalise these brands through expanded distribution, innovation and investments,” said Deol, chairman of Inbrew.

The sale will include the business undertakings associated with the brands, like related permits, intellectual property rights, associated employees, and manufacturing facilities. It follows USL reviewing its entire brand portfolio in order to increase its focus on premium and international brands. The one-year review was completed in March this year.

In 2021, Inbrew also acquired the India business of Molson Coors, to sell and produce beer brands such as Miller, Carling, Blue Moon and Cobra in India.

Deol launched in 2007 a special purpose acquisition vehicle (SPAC) called India Hospitality Corp (IHC), which raised $175 million in the Alternative Investment Market, UK. With the funding, IHC acquired a portfolio of operating companies in India including SkyGourmet, an air catering firm, Mars Restaurants, and Gordon House of boutique hotels. SkyGourmet, under Deel’s leadership, was acquired by Swiss giant Gategroup AG in 2011.

Deol also set up Barista Coffee in late 1999 which was acquired by Tata Beverages in 2005 and was later owned by Lavazza S.p.A. of Italy. In 2006, Ravi created India’s first global retail joint-venture between Bharti and Wal-Mart.

United Spirits stock closed at Rs 779 a share, up 2.43 per cent, on Friday, giving a total market valuation of Rs 56,579 crore. Diageo owns 57 per cent stake in the Indian arm.

United Spirits has a comprehensive brand portfolio with over 80 brands of Scotch whisky, IMFL whisky, brandy, rum, vodka and gin. Nine of these brands sell more than a million cases annually. The company produces and sells around 80 million cases in India.

Diageo had acquired United Spirits from Vijay Mallya, now a fugitive wanted by the Indian authorities, for $2.1 billion in November 2012--in its bid into the fast growing Indian market.