In November 2012
Diageo, British Giant in Liquor buys 53.4 stake in United Spirits limited for Rs.
12000 crore, Now it’s turn for Indian Fourth largest liquor maker Radico
Khaitan , they are in talks with Japan’s Suntory Holdings to sell 26% stake. This
deal will fetch Rs. 870 Crore for company at enterprise value of Rs. 3500 crore
close to 20 times its FY13 operating profit.
Diageo accounts for
50% of the Indian spirits market after acquiring USL.
Radico had sales of 24.4 billion
($446 million) in fiscal 2012.
Radico Khaitan in 2006
owns Magic Moments Vodka.
Radico Khiatan was in
1996 was supplying alcohol to United
Breweries, Shaw Wallace and Mohan Meakins
It has launched the 8
PM whiskey in 1996.
Radico Khiatan has
following well known brands :-
è
8 PM Whisky
è
Magic Moments Vodka
This deal will also
include likely to include a provision to buy another 23% stake a year later at
by valuing company at Rs. 4200 crore i.e. accepting 20% growth of company.
Radico currently has
rights to market Suntory Whisky brands when they formed partnership in 2011:-
è
Yamazaki Single Malt
è
Hibiki
Suntory wants to enter
Highly regulated Indian Liquor Market.
Suntory In January said it was acquiring Beam Inc, the US maker
of Jim Beam whisky in a $16-billion deal that would create the world’s
third-largest premium spirits maker.
àUBS Bank
is advisor to Radico Khaitan
à Suntory may get advisor bank from Japanese
multinational investment bank.
Earlier in 2011
Khaitan began talks with Suntory but deal doesn’t get finalized as issue was
over majority control.
As 60% of Indians ages
between 15-45 years so Liquor sales in India are expected to reach 360 million
cases by 2017 from 261 million cases.
Currently Radico
accounts for 18 million cases in the Indian spirits market, with 8 PM whisky
alone crossing four million cases.
Suntory In 2009 attempted an unsuccessful
attempt to acquire a stake in Indage Vinters.