Diageo said to discuss the sale of Whyte & Mackay to Philippines

On 2 May 2014 media reported that Diageo, the world’s major drinks group, is holding talks to sell the Whyte & Mackay (W&M) spirits business to Alliance Global Group, a Philippines-based company which produces Emperador brandy.

Diageo acquired Scotland’s W&M last year when it purchased a controlling interest in W&M’s Indian parent, United Spirits. Diageo subsequently offered to sell most of the business to assuage concerns by the UK competition watchdog, the Office of Fair Trading (OFT).

The sale to the Philippines company could value W&M at about GBP 400 million (USD 675 million), it was reported. United Spirits bought W&M for GBP 595 million in 2007.

“A lot of what Whyte & Mackay sells is bulk grain whiskies to supermarkets,” said Trevor Stirling, an analyst at Sanford C. Bernstein in London.

In addition to owning Emperador, the world’s largest maker of brandy, Alliance Global has interests in property development, food and gaming. Emperador is controlled by billionaire Andrew Tan.

Diageo owns about 29 percent of United Spirits, which combined with voting and other governance arrangements with former owner Vijay Mallya, was enough for control. Diageo last month announced a further open offer to United Spirits investors, which could lead to it holding more than 50 percent.