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India's UB Group buys Whyte & Mackay for $1.2 bln

India's United Spirits Ltd.  said on Wednesday it had bought 100 percent of Scottish spirits maker Whyte & Mackay for 595 million pounds ($1.18 billion), sending the company's shares up as much as 6.4 percent.

United Spirits, part of the UB Group of companies, has 60 percent of the Indian market and plans to introduce Whyte & Mackay's brands into India immediately.

“Until today, the only missing link in our portfolio has been Scotch and due to the shortage and rapidly increasing prices of Scotch Whisky, we needed a reliable supply source,” the company's chairman, Vijay Mallya, said in a statement.

Shares in United Spirits were up 6.3 percent at 890 rupees at 0904 GMT, slightly below their peak of 891 rupees in a firm Mumbai market.

The deal would boost the earnings of United Spirits, Mallya said.

“The combined profits of United Spirits and Whyte & Mackay are expected to be earnings accretive from the first completed year of operations after accounting for the cost of funds applied to the acquisition,” he said.

Demand for premium brands of whisky, along with other consumer goods, apparels and luxury cars has been rising in India because of rising wealth in Asia's fourth-largest economy.

United Spirits was advised by UBS , ICICI Bank  and Standard Chartered , while Whyte & Mackay was advised by Citigroup.ICICI Bank and Citibank arranged the funds for the deal, the Indian company said.

Source : Reuters

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