United Spirits took control of Balaji Distilleries back in April

United Spirits took control of Balaji Distilleries back in April

United Spirits has finally been given the green light by Indian authorities for its planned merger of Balaji Distilleries.

The Indian drinks giant, which announced its intention to merge Balaji into United Spirits in late-2008, said yesterday (6 December) that the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) gave the go-ahead on 29 November for the move. Balaji, which has been an exclusive producer of Indian-made foreign liquor (IMFL) for United Spirits since it was formed in 1983, merged with United Spirits on 1 April last year.

As announced in 2008, United Spirits will issue two equity shares for every 55 shares in Balaji, which is based in Tamil Nadu province in the south-east of India.

"This market (Tamil Nadu) is one of the largest and strategically important for United Spirits as it accounts for over 12% of the national volumes of United Spirits," said United Spirits in a statement. "Despite the importance of this market, United Spirits did not own a production facility in the state, depending solely on contract manufacturing arrangements."

Balaji's distillery has a capacity of 12m cases per year. The firm also has brewing operations, which will transfer to its Chennai Breweries Pvt unit. United Spirits will subsequently make Chennai Breweries a fully-owned subsidiary.