Tilaknagar Industries, the maker of Mansion House, India's largest selling brandy and the second largest selling brandy globally, has signed definitive documents to acquire the Imperial Blue whiskey business division for an enterprise value of Rs 4,150 crore from the Indian arm of French liquor giant Pernod Ricard, according to an official announcement.
On July 7, Moneycontrol was the first to report that Mumbai-based listed liquor firm had edged ahead of other suitors and entered into exclusive negotiations with Pernod Ricard for the buyout of Imperial Blue whiskey.
The report had added if the negotiations proceed as planned, a final agreement could be signed between both the parties later this month. "Tilaknagar Industries is planning to fund the proposed deal via a combination of debt and equity," Moneycontrol had reported.
Explaining its rationale for the acquisition, Tilaknagar said it wants to create a pan India IMFL business. "One of the primary objectives of the company with regard to the acquisition of Imperial Blue Business undertaking is to create a pan India IMFL business. The acquisition marks the company’s foray into Indian whiskey segment," it said in a statement.
Imperial Blue is currently the third largest brand in Indian-made foreign liquor (IMFL) segment and with the acquisition, the company will become one of the leading players in the brandy and the whiskey segment, which are the two largest IMFL segments, the firm said. "Imperial Blue shall serve as a base for the company’s premium portfolio strategy. This acquisition would also strengthen the distribution network of the Company," Tilaknagar Industries said.
Amit Dahanukar, chairman and managing director, Tilaknagar Industries Ltd said, “Having achieved leadership in the brandy segment, it is now time for us to broaden our portfolio and cater to India’s diverse and evolving consumer base. While we continue to grow our business organically, this strategic acquisition allows us to enter the whisky category with one of the country’s most trusted and admired brands.”
Pernod Ricard said the sale will enable it to fully tap into premiumization trends and support sustainable growth.
"This sale strengthens Pernod Ricard India’s portfolio, enabling the business to fully tap into
premiumization trends and support sustained, profitable growth. As Pernod Ricard’s second-largest
market, India is a strategic priority, and this realignment improves the ability to capitalize on the
country’s strong macroeconomic fundamentals and long-term potential. Upon closing, the
transaction is expected to be immediately and meaningfully accretive to Pernod Ricard India’s
operating margin and net sales growth rate," Pernod Ricard said.
Alexandre Ricard, chairman and CEO of Pernod Ricard, stated: “We are pleased to announce
the sale of the Imperial Blue business division, a strategic move to sharpen our focus on more
profitable and faster growing brands in India, like in the rest of the world. This transaction represents a win-win for all stakeholders involved, both at the global and local level. It fuels our ambition to succeed even further in one of our top markets. This will further streamline our operations as we continue to invest in India’s outstanding growth.”
The transaction remains subject to the approval from the Competition Commission of India, and
closing is expected to occur within the coming months.
Deutsche Bank and Avendus Capital acted as financial advisors, with Avendus Capital also serving as the exclusive financing arranger to Tilaknagar Industries. Crawford Bayley & Co. and W.S. Kane & Co. acted as legal counsels while Deloitte served as the diligence advisor to Tilaknagar Industries.
On December 17, Moneycontrol was also the first to report that Tilaknagar Industries and Inbrew Beverages were gearing up to enter the final round for the sale of Imperial Blue whiskey.
Goldman Sachs is acting as the sell-side advisor on the deal, the December 17 report had said, also adding that Tilaknagar Industries is keen on expanding in the whiskey segment.
Meanwhile, the share price of Tilaknagar Industries has risen by nearly 31 percent in the last month. Mansion House Gold Barrel whiskey, Blue Lagoon gin, Madira Gold Dark XXX rum also form part of it's portfolio.
In May 2022, aimed at focusing on brands like Johnnie Walker whiskey, Pernod Ricard's global rival Diageo's arm United Spirits sold 32 brands like Haywards, Old Tavern and Green Label to Inbrew Beverages for $106 mn.
The last mega acquisition in the Indian liquor segment was Diageo's acquisition of United Spirits for around $1.9 bn back in 2014.
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