* Enterprise value at 430 mln pounds is 19.3 times EBITDA
* Deal delivers global distribution network
* Regulator, shareholder approvals needed
(Adds deal multiple, quotes, background, additional
By Nandita Bose and Martinne Geller
MUMBAI/LONDON, May 9 India's United Spirits Ltd
agreed to sell its Whyte & Mackay scotch whisky unit
to Emperador Inc in a 430 million pound ($729 million)
deal that satisfies UK antitrust concerns and the Filipino
company's thirst for growth.
United must sell Whyte & Mackay after world whisky leader
Diageo Plc took a controlling stake in the Indian
spirits maker. Britain's competition authority said Diageo's
Bell's brand competes with Whyte & Mackay's whisky and that the
combination could stifle competition.
Emperador, known for its brandy, said the deal was in line
with its plans to expand its portfolio.
"We believe that Whyte & Mackay is a prized asset with
excellent growth opportunity," said Emperador Chairman Andrew
Tan, a billionaire who is one of the Philippines' richest
people. He said the firm continued to look at other investments.
With an enterprise value of 430 million pounds, the deal
represents a multiple of 19.3 times estimated 2014 earnings
before interest, tax, depreciation and amortization (EBITDA), a
very high price considering how much of its business is
low-priced and unbranded bulk whisky.
Suntory Holdings recently paid 20 times EBITDA
for Beam, and LVMH paid 23 times for Glenmorangie in
2004, but those involved large well-known brands.
Excluding the Whyte & Mackay brand and its bulk whisky, the
remaining malt whiskies Dalmore, Jura, Tamnavulin and Fetercairn
fetched a multiple that was "stratospheric," said a person
familiar with the matter, adding that Emperador beat two other
bidders in the last round.
Diageo originally wanted to keep Dalmore and Tamnavulin, but
sources told Reuters last year that including the high-end
Dalmore would lead to a more lucrative sale.
In April, Diageo launched a $1.9 billion bid to nearly
double its stake in United Spirits to 54.8 percent. The Indian
company was previously owned by tycoon Vijay Mallya, who has
shed assets under a heavy debt load and after the collapse of
United Spirits acquired Whyte & Mackay seven years ago from
its former Chief Executive Vivian Imerman for 595 million
The deal remains subject to regulatory approvals in India
and Britain as well as from the Reserve Bank of India.
The central bank's approval is needed, because the sale will
result in a significant write-off of loan amounts recoverable by
United Spirits from its British subsidiary, the statement added.
It did not give details.
Last year United Spirits mandated Rothschild, Rabobank and
Standard Chartered to manage the sale process. Emperador was
advised by Macquarie.
($1 = 0.5899 British Pounds)
(Editing by Jane Baird and Keiron Henderson)