May 9 (Bloomberg) -- Diageo Plc’s United Spirits Ltd. unit agreed to sell its Whyte & Mackay spirits business to Philippines-based brandy maker Emperador Inc. for 430 million pounds ($726 million) including the assumption of debt.
United Spirits’s board of directors recommended the sale at a meeting today, it said today in a statement. The sale is subject to regulatory approvals in India and the U.K.
Diageo, the world’s biggest distiller, acquired Whyte & Mackay last year when it purchased a controlling interest in W&M’s Indian parent, United Spirits. The London-based liquor maker subsequently offered to sell most of the business to assuage concerns by the U.K. Office of Fair Trading that the takeover could lead to higher blended whisky prices in the U.K.
The OFT said in November that Diageo’s proposal included the disposal of Jura malt whisky and all W&M’s blended brands, including Whyte & Mackay and whiskies it sells to retailers to bottle under their own labels. The Dalmore and Tamnavulin malt distilleries would be retained, the regulator said. No details were included in today’s statement on the brands being sold.
Emperador, a unit of Alliance Global Group Inc., is the world’s largest maker of brandy. Alliance Global also has interests in property development, food and gaming. Emperador, controlled by billionaire Andrew Tan, said April 25 that first-quarter sales rose 17 percent to 7.7 billion pesos ($173 million) and that it was seeking to expand globally.
Emperador shares rose to a four-month high in Manila on March 6 after the announcement of an agreement to distribute Diageo’s brands in the Philippines.
Diageo owns about 29 percent of United Spirits, which combined with voting and other governance arrangements with former owner Vijay Mallya is enough for control. Diageo last month announced a further open offer to United Spirits investors, which could lead to it holding more than 50 percent.
United Spirits bought Glasgow, Scotland-based Whyte & Mackay for 595 million pounds in 2007.
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