The board of United Spirits Limited (USL) has approved a plan to sell Whyte and Mackay Ltd (W&M), an indirect wholly-owned subsidiary of the company, in a bid to allay anti-trust concerns raised by the UK’s Office of Fair Trading following USL’s plans to sell a strategic shareholding in the company to Diageo Plc.
In a filing to BSE on Thursday, USL said its board “proposes to initiate a process, based on the outline timetable provided under UK law in connection with the decision of the Office of Fair Trading, to explore a potential sale of W&M.”
The company said that its board has nominated “certain persons” to evaluate possibilities and structures in relation to a potential sale of W&M, and identify potential buyers.
The UK Office of Fair Trading had said in November last year that Diageo, the maker of whiskies like Johnnie Walker and Bell’s, which bought a 25.02 per cent stake in United Spirits in July, had offered to sell a majority of the W&M business after the regulator raised concerns about the impact of the United Spirits deal on UK whisky prices.
The USL board also approved the amalgamation of its wholly-owned subsidiaries Tern Distilleries Pvt Ltd and SW Finance Co Ltd (formerly Shaw Wallace Breweries Ltd) with itself.
Tern Distilleries was referred to the Board for Industrial and Financial Reconstruction (BIFR), which had declared it a sick company and and ordered filing of the Draft Rehabilitation Scheme. As part of the scheme, Tern was proposed to amalgamate with USL, its parent company.
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