Seven years after Vijay Mallya bought the Whyte & Mackay for a record £595 million (Rs 4,783 crore), the liquor company is back on the block.
The board of United Spirits, which owns Whyte & Mackay, gave its formal approval on Thursday to sell the Glasgow-based liquor company. United Spirits is now controlled by British liquor major Diageo.
The United Spirits decision comes on the heels of a ruling by the UK’s anti-trust regulator, Office of Fair Trading, which said that as both Diageo and Whyte & Mackay supply blended bottled whisky, there could be a loss of competition, giving rise to higher prices for retailers and consumers.
Diageo had earlier informed the Office of Fair Trading that it was willing to sell its stake in Whyte & Mackay to ease any anti-trust concerns.
According to market reports, Diageo could get as much as $1 billion from the sale of Whyte & Mackay.
Mallya bought Whyte & Mackay after a series of negotiations with its owner, Ivan Imerman, who is understood to have expressed an interest in getting the company back now. As part of the terms of the Whyte & Mackay sale, Imerman was restrained from working in the liquor industry for five years.
Japanese liquor major, Suntory, is also understood to be in the race for Whyte & Mackay and has had preliminary talks with Diageo.
Whyte & Mackay has been steadily making profits over the last few years. In 2012-13, its pre-tax profits rose nearly 28 per cent to £34 million while revenues increased 16 per cent to £263 million.
On Thursday, United Spirits shares closed nearly flat at Rs 2,709.35.