Diageo-controlled United Spirits is acquiring a “majority controlling stake” in Indian distiller Nao Spirits.
The deal, valued at around Rs1.3bn ($15.2m), will see United Spirits initially own 97.07% of New Delhi-based Nao Spirits.
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United Spirits initially acquired a 22.5% stake in the maker of Hapusa and Greater Than gin three years ago. The following year, United Spirits, in which Diageo owns a majority stake, bought a further 7.5%.
In a stock exchange filing yesterday (19 June), United Spirits said it will purchase 37,683 shares from investors in Nao Spirits in two tranches for around Rs538m.
The company will also invest approximately Rs560m through a fresh subscription of 31,820 equity shares and 27,577 compulsorily convertible preference shares (CCPS).
Upon the completion of the first tranche and the new share issuance, United Spirits will hold the 97.07% stake.
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By GlobalDataA second tranche, to be finalised later, will increase United Spirits’ ownership to 100%.
The United Spirits board has also approved an additional investment of up to Rs200m in Nao Spirits through equity or CCPS to support its working capital and business needs.
Praveen Someshwar, the MD and CEO of United Spirits, who took on the role in January and is a former PepsiCo executive, called the Nao Spirits deal a “pivotal step in exploring future growth opportunities in Indian craft spirits”.
Nao Spirits was launched in 2016 by Anand Virmani and is one of India’s emerging ‘craft’ gin companies. Its Greater Than and Hapusa gin brands are made with Indian spices and botanicals.
Virmani said the investment will help Nao Spirits “scale further with the support of Diageo India’s seasoned leadership, distribution network and production capabilities”.
Bengaluru-based United Spirits has 35 manufacturing facilities across the country.
It produces, markets and distributes brands including Johnnie Walker, Black Dog, Royal Challenge, McDowell’s No1, and Smirnoff.
In April, United Spirits took a 15% stake in Inspired Hospitality, an Indian producer that owns agave-spirit brand Pistola, for Rs56m.
