Deal size estimated at Rs 40 cr
Bangalore, May 3
Bagga Millennium, one of the largest liquor distributors in the country, is understood to be close to buying the Rs 400-crore BI Group's Khasa distillery.
The deal size, which is learnt to be worth around Rs 40 crore, will allow Bagga Millennium to consolidate its operations in the north, sources close to the deal told
It will also help Bagga Millennium source its requirements for its distillery in Hyderabad. The Khasa Distillery is over 100 years old and is located in Amritsar. Sources said that this is one of the latest of the middle-rung consolidation happening in the liquor industry.
A Bagga Millennium official admitted that his company had bid for the distillery but did not indicate how soon the deal would be finalised.
Sources said the BI Group had mandated PricewaterhouseCoopers to finalise the bids.
Sealing the deal
Bagga Millennium, which holds the national manufacturing and distribution rights for the Khodays IMFL brands, had earlier indicated that it was open to acquisitions.
It has been on the lookout for marketing and distribution rights for regional brands. The Hyderabad-based company had earlier been a key bottler for the UB Group and the Shaw Wallace Group.
The Khasa Distillery was understood to be on the block previously too, with a quite a few liquor companies showing interest in buying out the distillery.
But the deal apparently fell through because of the high price quoted by the owners of the distillery. Sources said that Khasa recently set up a modern 20 kilolitres per day ENA (extra-neutral alcohol) plant.
Khasa's current capacity is 85 kl and is engaged in the manufacture and selling of IMFL and country liquor.
The BI Group owns a clutch of companies and has interests in hotels, publications, education, media services, and real estate.
It owns the Marina Hotel in Delhi and a hotel in Agra.
It is planning to renovate the Marina Hotel and is looking to tie up with an international group of hotels.