Financial Daily from THE HINDU group of publications
Monday, Nov 11, 2002
Financial Daily from THE HINDU group of publications Monday, Nov 11, 2002 |
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Breweries Corporate - Mergers & Acquisitions Diageo may offload IMFL biz for Rs 40 cr Boby Kurian
BANGALORE, Nov. 10 THE global drinks giant, Diageo Plc, is likely to offload its Indian-Made Foreign Liquor (IMFL) interests, which it holds through UDV India Ltd, at close to Rs 40 crore. Top Diageo officials are expected in the country early next week for final negotiations and the first set of papers are likely to be signed around November 15. It is learnt that Mr Deepak Roy, a former head of UDV India, and McDowell & Co, the spirits flagship of UB group, are the frontrunners in the race. When contacted, UDV officials said they were hopeful of concluding an agreement with the successful bidder in the "next seven to 10 days." The IMFL operations of UDV India was put on the block earlier this year as Diageo decided to streamline its regional operations and henceforth focus only on its global brands. This followed the consolidation within the Diageo that saw the merger of UDV with Guinness to form Guinness UDV. The deal would include the Gilbey's range of local whiskies such as Green Label, Old Gold and Gold Club, apart from the manufacturing plant at Neera in Maharashtra. Sources close to the negotiations said the deal might be valued around Rs 40 crore. "This could vary depending on whether the final agreement includes the current assets and the debts, and to what extent," sources added. UDV India officials said the debts pertaining to IMFL operations would be acquired by the final bidder at a discounted rate. The officials rebuffed speculations that valuation would suffer as the deal had dragged for a while resulting in the declining sales of brands put on sale. However, it is learnt that the bidders are treading cautiously on the trademark-related issues of the brands, especially that of Gilbey's Green Label, which sells between 1.5 million and two million cases annually.
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