INDIA: Globus Spirits, Associated Distillers merger gets go-ahead
The merger of Globus Spirits and ADL was okayed retrospectively last week
Globus Spirits has had its merger with Associated Distillers Limited (ADL) rubber-stamped by the Indian authorities.
The company, which operates in the Indian-Made Foreign Liquor (IMFL) and 'country liquor' categories, confirmed on Friday (2 September) that the Hon. High Court of Delhi has sanctioned the move. The transaction took place in April last year, but got the all-clear from the court last week .
Each ADL share of INR10 (US$0.22) will be swapped for six Globus shares of INR10 each, according to Globus. This will result in Globus' share capital dropping from 19.7m shares to 22.9m.
ADL operates in the states of Haryana and Delhi and accounts for around 10% market share in each. The company also has a bottling JV with ABD India in Haryana. The merger would "translate into a higher market share for Globus in the CL segment whilst further strengthening bottling ties-ups", Globus noted.
“The merger is expected to result in a stronger footprint in the Country Liquor segment across Haryana and Delhi, and also augment our contract manufacturing business,” said Globus' MD, Ajay Swarup. “It will bring operational synergies and efficiencies which we will leverage to strengthen our position as a leading cross-segment player in the alcobev sector in the country.
“Our volume growth will also be accelerated by the huge production which will now be available as a result of this merger. The demand environment remains robust and, with a larger operating base which includes enhanced capacities, we remain confident of delivering sustained growth going forward.”
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