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Boby Kurian

Bangalore , March 22

THE United Breweries group Chairman, Mr Vijay Mallya, is poised to merge his entire spirits interests, including the just acquired Shaw Wallace & Co (SWC), under the banner of United Spirits, and is looking at unlocking value mostly through the induction of a foreign partner.

Speaking to Business Line, Mr Mallya said he would look at unlocking value within 18-24 months. "United Spirits as an entity will be in the horizon in the next four to six months," he said.

The consolidation of Mr Mallya's spirits interests will be a two-fold affair. Initially, three of UB's existing companies — McDowell & Co, Herbertsons and Triumph Distillers & Vintners — will be merged under the banner of United Spirits during the coming financial year, 2005-06.

Subsequently, SWC, for which he signed a Rs 1,300-crore acquisition agreement with the Manu Chhabria family less than 48 hours ago, will also be merged with United Spirits, placing it firmly as the world's second largest spirits marketer.

Following the merger, Mr Mallya's direct and indirect stake in the new entity could be well over 50 per cent. He holds over 40 per cent stake in his existing spirits flagship company, McDowell & Co Ltd.

The UB group Chief Executive Officer (CFO), Mr Ravi Nedungadi, said that a few reputed intermediaries on behalf of various multinational spirits companies have approached the group, exploring the possibility of a deal.

"We have told them that we would be happy to discuss the matter some months down the line," he said. Even as he refused to be drawn into enterprise valuation, indications are that the emerging behemoth could look at a figure between Rs 8,000 crore to Rs 10,000 crore.

"By striking a joint venture with Scottish & Newcastle in the beer business, Mr Mallya has already demonstrated his willingness to dilute stake and his willingness to share management through a very transparent structure," Mr Nedungadi added.

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