Tilaknagar Industries, the maker of Mansion House, India's largest selling brandy and the second largest selling brandy globally, has edged ahead of other suitors and entered into exclusive negotiations for the proposed buyout of Imperial Blue whiskey, owned by French liquor giant Pernod Ricard, multiple industry sources in the know told Moneycontrol.
If the negotiations proceed as planned, a final agreement could be signed between both the parties later this month, the sources added.
"As of now, Tilaknagar Industries is planning to fund the proposed deal via a combination of debt and equity," one of the persons above added.
A second person added that the ongoing talks may or may not necessarily fructify into an eventual transaction and other contenders may make a comeback later if required.
Both the persons quoted above spoke on the condition of anonymity.
On December 17, Moneycontrol was the first to report that Tilaknagar Industries and Inbrew Beverages were gearing up to enter the final round of the proposed transaction.
Binding bids for the proposed transaction were submitted recently by bidders, which include serial entrepreneur Ravi Deol-backed Inbrew Beverages, which is behind Bagpiper Whiskey and White Mischief Vodka. The Economic Times reported last month that Japanese multinational Suntory had also revived interest in the ongoing sale process.
Through the Imperial Blue sale process, Pernod Ricard can focus on higher-margin, premium whiskey brands like Chivas Regal, Glenlivet and Jameson. Since Imperial Blue became part of Pernod Ricard in 2002, "its success has grown year on year, and today it is the group’s largest brand by volume", as per the firm's website.
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.
Moneycontrol could not independently verify the deal valuations. The last mega acquisition in the Indian liquor segment was Diageo's acquisition of United Spirits for around $1.9 bn back in 2014.
Mansion House Gold Barrel whiskey, Blue Lagoon gin, Madira Gold Dark XXX rum also form part of the Tilaknagar Industries portfolio.
On other hand, brands like Green Label whiskey, Old Tavern whiskey, Blue Riband Gin, Romanov Vodka, Doctor's Brandy and Miller Beer fall under the Inbrew Beverages umbrella in India.
In response to an email query from Moneycontrol, a spokesperson for Pernod Ricard said, "Pernod Ricard regularly reviews strategic options for its development, including its brand/ business portfolio. As a matter of company policy, the company does not comment on market rumors or speculations."
Emails and reminders to Tilaknagar Industries remained unanswered at the time of publishing this article. Text messages and calls to the Chairman and MD Amit Dahanukar were also left unanswered. This article will be updated as soon as we hear from the parties.
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.
During the Q2FY25 earnings call, Ameya Deshpande, President (Strategy and Corporate), Tilaknagar Industries said, "Our vision 2030 would be more like an 80:20 saliency whereby 80 percent of our business is still driven by brandy, but non-brandy kind of expands to 20 percent from the current 6 per cent."
In the past, Tilaknagar Industries made investments in the alco-bev segment, including ready-to-pour beverage company Bartisans and Spaceman Spirits, which owns Samsara Gin. The firm's consolidated net profit rose sharply by 55.7 per cent to Rs 40.09 crore in Q1FY25 as against 25.75 crore posted in Q1 FY24.
Imperial Blue and the Pernod Ricard India strategy
Imperial Blue was launched in India in 1997. It is Pernod Ricard's second best-selling Indian whisky, behind Royal Stag, having sold 22.8 million nine-litre cases in 2023 according to the Drinks International Millionaires’ Club.
In 2024, Pernod Ricard announced investment plans of up to 200 million euros in India – including the creation of one of India’s biggest malt distilleries. To set the foundations, the firm signed a Memorandum of Understanding with the Government of Maharashtra. The distillery, planned for construction in Nagpur, will be capable of producing up to 60,000 litres of fresh malt spirit per day.
Pernod Ricard's India focus is highlighted in its 2023-2024 annual report.
"India is poised to become a hub for authentic luxury and heritage craft. As the industry leader, Pernod Ricard is committed to playing a key role in accelerating the country’s growth in the luxury sector. In line with the growing trend of premiumisation in India, our strategic focus is on offering quality over quantity – a paradigm shift that resonates with the evolving aspirations of this market’s consumers," the annual report says.
The annual report also adds that with over 500,000 9L cases sold in FY24, India has become Jameson’s second-largest market globally.
In other deals in the sector, Nikhil Kamath revealed he had a small minority stake in Magic Moments Vodka and 8 PM whiskey maker Radico Khaitan earlier in the year. Japan's Kirin Holdings invested $25 million and increased its stake in B9 beverages, the maker of Bira 91 and owner of the Beer Cafe chain.
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