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Gruppo Campari sweet on $580m Whyte & Mackay?

17-Mar-2014
Last updated on 17-Mar-2014 at 15:50 GMT - By Ben Bouckley+
Whyte & Mackay: Reports suggest Campari could be interested
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United Spirits will reportedly fetch £350m for its Whyte & Mackay whisky business in the UK, with rumours spreading that Gruppo Campari could be interested given its sizable war chest.

Reuters cited ‘sources’ last Wednesday identifying SPI Group (Stolichnaya vodka), Italy’s Gruppo Campari and private equity houses Lion Capital and TPG Capital Management as possible buyers.

Diageo suggested the sale to satisfy UK regulators’ competition concerns over its $2bn purchase of a 53.4% majority stake in India’s United Spirits.

The newswire said its sources predicted a sale at around £350m ($580m), possibly higher due to growing consumer demand for brown spirits – with United Spirits accepting bids for the business with and without single malt distilleries Tamnavulin and Dalmore.

Asked late last year for his view on Diageo’s feelings regarding the Whyte & Mackay sale, Shore Capital analyst Phil Carroll told this website he believed the global giant would be keen to hang on to the single malt distilleries

“I don’t think they’ll be too worried [about the disposal generally] given the weighting [of the UK assets] towards private label,” he said.

“Diageo is interested in brands and brand development. That said, keeping the assets that supply United Spirits, I would imagine, would be important. Hence not selling Whyte & Mackay in its entirety,” Carroll added.

Gruppo Campari CEO Bob Kunze-Concewitz told journalists last week that his firm has around €350m ($485 million) to spend on acquisitions after buying Canada’s Forty Creek Distillery for CAD $167m.

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Related topics: Emerging Markets, Manufacturers, Diageo, Beer, Wine, Spirits, Cider