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News
Whyte & Mackay sale expected to reach £450m
United Spirits has hired three banks to handle the sale of its Whyte & Mackay Scotch business, which is expected to fetch £450 million.
United Spirits has hired a trio of banks to deal with the sale of its Whyte & Mackay business
Investment banks Rothschild, Rabobank, and Standard Chartered will deal with the sale of the Scotch brand, for which proceedings are expected to start next week.
According to reports, the sale is expected to fetch around £450 million.
Whyte & Mackay has been put up for sale by India’s United Spirits. Diageo, which has completed a majority takeover of United Spirits, is leaving the sale of the Scotch company to its Indian counterpart.
UK regulator the Office of Fair Trading (OFT) raised concerns about Diageo’s acquisition of a controlling stake in United Spirits in November last year, citing competition concerns.
The OFT found there to currently be “substantial competition in the retail sector between Bell’s whisky, a Diageo label, and Whyte & Mackay’s own-label and branded blended whisky”.
It was subsequently ruled that Diageo’s ownership of Whyte & Mackay would substantially reduce that competition, and potentially cause price increases for retailers.
Chris Walters, OFT chief economist and decision maker for the case, said at the time: “These companies are two of the leading suppliers of blended bottled whisky in the UK, especially to supermarkets and other large retailers.
“Our investigation considered a wide range of evidence and we concluded that the likely loss of competition could give rise to higher prices for retailers, and ultimately consumers.”
The UK drinks giant therefore considered selling Whyte & Mackay to alleviate competition concerns.
Initially, Diageo proposed to keep The Dalmore and Tamnavulin malt distilleries that supply United Spirits and primary international markets.
However, according to The Telegraph, bidders are invited to include offers for The Dalmore single malt brand, adding that this would significantly increase the expected £450m price tag.
A spokesperson for Diageo said they were not in a position to comment about the news, deferring requests to United Spirits, which has not yet responded.