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Whyte & Mackay sale imminent

Published:  23 July, 2008

The sale of Whyte & Mackay, the leading independent whisky distiller, will be finalised this week, Harpers understands.

It is expected that it will be sold to India's United Breweries (UB), part of the business empire built up by the flamboyant Vijay Mallya, for 550 million. Final details are being negotiated and a deal is expected in the next few days, with the takeover being completed by the end of March.

Mallya has been stalking the company since well before Christmas. However, his original valuation of 475m was far below the 600m placed on it by chairman Vivian Immerman. That gap has now been bridged.

The Indian tycoon will add the eponymous Whyte & Mackay plus the Isle of Jura and Dalmore brands, as well as Vladivar vodka, to his Kingfisher beer and Indian spirits business. Last year he made a failed bid for Taittinger Champagne but succeeded in winning Bouvet Ladubey, the Loire sparkling wine producer.

A sale price of 550m will represent a considerable profit for Immerman and his brother-in-law, the entrepreneur Robert Tchenguiz. With a group of other investors, they bought the company in 2001 for 208m and then took full control in 2005. Under their ownership, Whyte & Mackay has switched from being primarily a producer of own-label spirits to concentrating on premium brands, and has about a 9% share of the global market for Scotch.

That is its attraction to Mallya, because Scotch is gaining unprecedented popularity in India. Already, UB is the third-largest spirits producer in the world, with an output of 60 million cases. Analysts say that Whyte & Mackay may be his first acquisition here because he wants a UK distiller so he can use its European distribution network for his Indian spirits.

Mallya's takeover of Whyte & Mackay will also add to the growing optimism that India will soon reduce its punitive import tariffs on Scotch, which can be as high as 550%.

Mallya has been one of the leading advocates of protection for his domestic brands, but as the impending owner of a major portfolio of premium Scotch brands, industry sources believe he will now lobby hard for the duties to be slashed.