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K. Giriprakash

Mallya rules out separate fund for global acquisition

Bangalore , July 13

UB Group has now turned its focus on two wine companies in South Africa for acquisitions but it will not take a decision in a hurry.

"The acquisition is not imminent right now. If there are synergies between the two, only then we will take a decision," the UB Group's Chairman, Dr Vijay Mallya told Business Line. The UB Group plans to buy one of the two shortlisted wine companies.

Dr Mallya also said that he will not have a separate fund for global acquisition. "Nobody keeps a budget for acquisitions. Look at the money involved in the Champagne Taittinger deal which was worth 700 million and the acquisition of Bouvet Ladubay which was worth 15 million," he pointed out.

While the bid for Champagne Taittinger was eventually won by Credit Agricole, Bouvet Ladubay, went to McDowells, which is part of the UB Group.

Dr Mallya said the acquisition of Bouvet Ladubay SAS, a company in France, would help the group to make an immediate impact in India. UB plans to launch high quality wines, both bottled in origin, in France and bulk imported to be bottled locally, to the emerging wine connoisseur in India. "The wine industry is growing rapidly in India and with concessions from some of the state governments, we hope to capture a larger share of the market," he said.

McDowells also plans to use the established distribution of the French wine maker in Europe and the US to push other products from its portfolio in the Western markets.

Scheme of amalgamation

The acquisition of the French company was made through Asian Opportunities and Investments Ltd, McDowell's wholly owned subsidiary in Mauritius. Last week, McDowells had in a notice to the Bombay Stock Exchange said that its board of directors had decided to withdraw the scheme of amalgamation of Asian Opportunities and Investments Ltd, through which the French wine maker was acquired, and another subsidiary, Zelinka Ltd with McDowells. This scheme of amalgamation was earlier approved at the board `s meeting and later by the Karnataka High Court.

Subsequently, the McDowell's board submitted to the court that it was withdrawing the scheme of amalgamation of Asian Opportunities as well as Zelinka because of "business needs.''

China, Russia foray

With regard to its foray into Russia and China, Dr Mallya said that it is in talks with companies in each of these countries for marketing each other's brands in these countries. For example, the Russian company's brands will be marketed in India, while UB Group's brands will be marketed in Russia.

More Stories on : Mergers & Acquisitions | Breweries

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