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Whyte & Mackay may be put on block to smoothen Diageo deal

Analysts say that several industry players such as Italy’s Gruppo Campari that owns the Glen Grant brand, Bacardi and Japanese firm Suntory would want to gulp up Whyte & Mackay (W&M) that owns brands such as Dalmore and Isle of Jura to scale up their presence in the Scotch market.

Names of buyout PE funds such as Carlyle are also being speculated upon. “Diageo has the largest share of Scotch production in the world. So it’s logical that W&M will have to be sold for the Diageo-United Spirits deal to go through,” Olly Wehring, managing editor of Just-Drinks.com, an UK-based beverage industry news provider, said.

“But for the moment, all eyes will be on the regulators and it will be premature to say anything with a degree of finality,” he added.

Diageo last week agreed to buy a majority 53.4% stake in United Spirits for $2.1 billion (approx Rs 11,000 crore) in a complicated two-part deal. W&M is 100% controlled by United Spirits.

Last Friday, in a post-deal investor call, Diageo chief executive officer Paul Walsh hinted that the firm is willing to give up Whyte & Mackay to ensure the United Spirits deal goes through smoothly.

“We do not feel that we need Whyte & Mackay as a production resource… From a brand point of view it has an interesting position in certain markets, but we have brands that could occupy that space,” he said.

Source: http://articles.economictimes.indiatimes.com/2012-11-17/news/35170723_1_whyte-mackay-malt-distilleries-scottish-distiller