New Delhi: Liquor major United Spirits Limited (USL) has announced the sale and franchising of 32 popular brands to Inbrew Beverages for an estimated ₹820 crore, the company said in a statement.
“USL and Inbrew have executed definitive agreements for the sale of the entire business undertaking associated with 32 brands, including iconic brands Haywards, Old Tavern, White-Mischief, Honey Bee, Green Label and Romanov, for a total cash consideration of approximately ₹820 crore, subject to customary adjustments,” the company said on Friday.
The sale comes over a year after USL initiated a strategic review of select popular brands in order to focus on premiumizing its portfolio in India.
The sale portfolio covers the entire business undertaking associated with the 32 brands including the related contracts, permits, intellectual property rights, associated employees, and a manufacturing facility.
“In addition to the above, USL and Inbrew have entered into a five-year franchise arrangement for 11 other brands, including Bagpiper,” it added.
The transaction does not include the McDowell’s or Director’s Special brands, which will be retained by USL. The company expects to complete the transaction by the end of the quarter ending 30 September 2022.
USL has also granted Inbrew a right, subject to certain conditions, to convert the fixed term franchise arrangement into one with perpetual rights to use and (or) a call option to acquire the brands at a pre-agreed consideration. Certain ancillary agreements, including transitional services arrangements, in relation to the sale of the business undertaking and the franchise and option agreements have been approved to be executed between USL and Inbrew, the company further added.
In FY22, USL’s popular segment accounted for 26.2% of net sales, down 2.6 percentage points compared to the same period last year.
“The transaction reflects the continued evolution of the management of the Popular portfolio since 2016, when the company moved to a franchise model in many states, to enable a sharpened focus on ‘Prestige & Above’,” said Hina Nagarajan, Managing Director and CEO, USL.
The move its set to “reshape” USL’s portfolio to deliver sustained double digit profitable top-line growth, Nagarajan said.
InBrew is largely a beer-focussed company with two breweries in India. It manufacturers and distributes a variety of beers including Blue Moon and Miller. In 2021, the Singapore-headquartered company owned by UK-based entrepreneur Ravi Deol, acquired Molson Coors Brewing Co.’s beer business in India.
Ravi Deol, chairman, Inbrew, said, “Inbrew will revitalise these brands through expanded distribution, innovation and investments. After the acquisition of Molson Coors’ beer business last year, we will now participate in the mainstream spirits category, making Inbrew India’s diverse AlcoBev player”.