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board of United Spirits(USL), in which UK-based Diageo has a stake, on Friday approved the sale of some of its popular brands and franchisees to Inbrew Beverages for Rs 820 crore in a cash deal.
USL and Inbrew have entered into definitive agreements for the sale of their entire business venture involving 32 brands, including iconic brands such as Haywards, Old Tavern, White-Mischief, Honey Bee, Green Label and Romanov. The deal is subject to customary adjustments, USL said in a late night announcement on BSE.
The move follows a strategic review of USL’s select popular brands announced on February 23, 2021, it said, adding that the transaction does not involve McDowell or Director’s exclusive brands, which will be retained by USL.
The sales portfolio covers the entire business venture involving 32 brands, including related contracts, permits, intellectual property rights, associated employees and a manufacturing facility. In addition, USL and Inbrew have entered into five-year franchise arrangements for 11 other brands, including Bagpiper.
USL authorizes Inbrew to convert a fixed-term franchise arrangement into one with permanent rights to use, subject to conditions, or provide a call option to acquire the brands on a pre-agreed consideration.
“The transaction reflects the continued evolution of the management of the popular portfolio since 2016, when the company moved to a franchise model across multiple states, to focus more on ‘Prestige & Above’. This is an important step in reshaping our portfolio to deliver sustained double-digit profitable topline growth in service of our publicly announced mission, said USL’s Managing Director and USL’s Chief Executive Officer.
Ravi Deol, Chairman, Inbrew, said: “The acquisition of these iconic brands provides Inbrew a unique platform to enhance its ambition to become India’s trusted home beverage company. These brands have delighted consumers for generations, and we Excited to continue to strengthen this legacy, Inbrew will revitalize these brands through expanded distribution, innovation and investment.
Until the resolution of the ongoing dispute and the release of the existing burden on the franchise brands, the legal title to the franchise brands remains with USL. The company expects to complete the transaction by the quarter ended September 30, 2022.
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