SPI and Campari quiet about Whyte & Mackay

Both Gruppo Campari and SPI Group have decline to comment on reports suggesting the two drinks groups are planning to bid for Whyte & Mackay.

Gruppo Campari and SPI Group have declined to confirm or deny reports they are planning to bid for Whyte & Mackay

Reuters reported earlier this week that Italy’s Campari and Russia’s SPI Group were interested in bidding to acquire Scotch whisky company Whyte & Mackay – which was revealed to be on the market for an estimated £450 million in February 2014.

The business was put up for sale by India’s United Spirits, which is currently in the midst of a tumultuous acquisition process by Diageo.

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”.

In order to mitigate competition concerns, United Spirits is offering to sell the whisky business, include its namesake Scotch brand.

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.

Bidding rumours

SPI Group, owner of Stolichnaya Vodka, and Gruppo Campari, owner of Wild Turkey, have been identified by sources cited by Reuters as businesses planning to bid.

Both groups have been seeking to increase their brown spirits portfolio and have also revealed they are on the merger and acquisition trail.

In particular, commenting on Campari’s recent acquisition of Canadian whisky producer Forty Creek Distillery for €120.5 million, the company’s CEO Bob Kunze-Concewitz, said, “this further increases our exposure to the highly attractive brown spirits category.”

Kunze-Concewitz also said that the company had a further €350m ($485m) to spend on acquisitions, but that future purchases, including that of Scotch, would not be “driven by category; we are driven by geography”.

In the group’s Scotch whisky stable currently sits Glen Grant single malt and Old Smuggler blended Scotch. Upon announcing its full year financial results for 2013, Campari revealed that Glen Grant experienced a “weak performance” while Old Smuggler reported “good” sales.

The Italian firm’s recent acquisition of Forty Creek and its launch of Irish Mist Irish whiskey demonstrates its intentions to enhance its presence across global the whisky sector.

SPI Group meanwhile does not have any brown variants in its spirits portfolio and may be looking to gain foothold in the market.

However, both Campari and SPI have declined to comment on whether they intend to bid for Whyte & Mackay.

Reuters’ sources said first-round bids had been due earlier this week and second-round bids were due next month.

The publication also said that two private equity firms, Lions Capital and TPG Capital were potential bidders. A spokesperson for Lions Capital decline to confirm the report, while TPG have not yet responded.