Suntory Offers Less Than $1 Billion for Whyte & Mackay: CNBC

Suntory Holdings Ltd., the Japanese whiskey and soft-drinks company controlled by billionaire Nobutada Saji, offered to buy out the entire Whyte & Mackay business from United Spirits Ltd., CNBC TV18 reported today, citing people it didn’t identify.

The Osaka-based company, which last week said it’s buying U.S. distiller Beam Inc. in its largest deal ever, has valued Whyte & Mackay at less than $1 billion, the channel reported.

Diageo Plc., the world’s biggest distiller, acquired Whyte & Mackay, which makes Scotch whisky including Jura and The Dalmore, when it bought India’s United Spirits last year for a foothold in emerging markets. Diageo said Nov. 25 that it has offered to sell most of Whyte & Mackay to assuage concerns expressed by the U.K. Office of Fair Trading that the acquisition could potentially lead to higher prices in the U.K. for blended whisky.

“It makes sense for Suntory to bid for Whyte & Mackay for its distillation capacity,” said Abhijeet Kundu, a Mumbai-based analyst at Antique Stock Broking Ltd. “Jim Beam gives them a U.S. presence and this would give them a U.K. presence.”

Kundu said that the Whyte & Mackay assets being sold by Diageo and United Spirits could be valued at about $750 million.

Suntory, which sells Orangina soda and Boss-brand canned coffee, on Jan. 13 agreed to pay $16 billion to buy Beam Inc., to gain brands such as Maker’s Mark whiskey and create the world’s third-largest premium spirits company.

Court Case

Suntory’s bid is backed by three private-equity funds, the financial news channel said. Vivian Imerman, a former chief executive officer of Whyte & Mackay who had earlier expressed interest in buying back the unit, has not submitted a formal bid, CNBC said.

Suntory Holdings spokeswoman Naoko Tsuda declined to comment by phone. Prakash Mirpuri, a spokesman for United Spirits and UB Group, also declined to comment.

A court in India’s Karnataka state ruled on Dec. 20 that Diageo’s purchase of United Spirits is void, ruling on a petition filed by creditor banks. In the 173-page order, the judges said a lower court did not have the jurisdiction to approve the deal when creditors had filed petitions seeking to wind up the company for non-payment of dues by its parent UB Holdings and group company Kingfisher Airlines Ltd.

Diageo and United Spirits have appealed the judgment, and India’s Supreme Court is likely to take up the case on Jan. 31.

Before it's here, it's on the Bloomberg Terminal.