Financial Daily from THE HINDU group of publications
Tuesday, Mar 08, 2005

Port Info

Group Sites

Corporate - Mergers & Acquisitions

SC okays out-of-court settlement — Mallya to acquire Kishore Chhabria's stake in Herbertsons for Rs 131 cr

Our Bureau

Bangalore , March 7

THE much-chronicled battle between the UB Group Chairman, Mr Vijay Mallya, and Mr Kishore Rajaram Chhabria for control over Herbertsons Ltd formally passed into history on Monday with the Supreme Court giving its nod for an out-of-court settlement between the two liquor majors.

As the apex court blessed the consent terms, UB will acquire Mr Chhabria's entire 49.06 per cent stake in Herbertsons, the third largest domestic spirits company, for a consideration of Rs 131.16 crore.

Mr Chhabria will walk out with the subsidiary company, BDA Ltd, which he had merged with Herbertsons. This merger occurred after he joined hands with Mr Mallya in 1992 following a bitter split with his elder brother Mr Manu Chhabria, who controlled Shaw Wallace & Co Ltd, the second largest spirits company in the country.

Business Line first reported the amicable settlement between the two camps, which led to Mr Chhabria depositing his entire shareholding in an escrow account with Kanga & Co, pending a nod from the court.

"The UB Group along with its associates will now hold 92.21 per cent shares in Herbertsons Ltd, once 49.06 per cent shares, which were held by Mr Chhabria and his companies, are transferred from the escrow account," Mr Ravi Nedungadi, President & Chief Operating Officer of the UB Group, said. "On receiving the certified copy of the order of the apex court, the escrow agent will transfer the shares to the UB Group for Rs 131.16 crore," Mr Nedungadi said. "This now clears the path for consolidation of UB's spirits business and formation of United Spirits Ltd to synergise all its liquor businesses under one umbrella," he added.

UB in the coming months is expected to merge McDowell & Co, Herbertsons and Triumph Distillers & Vintners under the United Spirits banner. The process will be kick-started shortly with independent valuation of each of the three entities for the purpose of share swap ratio.

The company is the world's fourth largest spirits marketer in the world and is likely to sell nearly 40 million cases during the ongoing financial year. The contribution of Herbertsons is significant with its three major brands — Bagpiper Whisky, Honey Bee Brandy and Romanov Vodka — contributing almost 10 million cases.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
GAIL investments overseas at Rs 257 cr

L&T-CASE gets Rs 2.5 cr order from Mumbai Corporation
RIL bags export awards
`Companies must recognise different skills of women'
Aditya Birla group enrolls execs for online MBA course
SC okays out-of-court settlement — Mallya to acquire Kishore Chhabria's stake in Herbertsons for Rs 131 cr
Dabur shareholders okay Balsara buy
Narmathaa Textiles sets up processing unit at Erode
Forbes group, HDFC set up publishing co
Custom-made coaches for Kingfisher Airlines
Sirpur Paper rights issue
Kerala CM moots Rs 20-cr loan from KMML to revive Autokast
Tata Motors aims for billion-dollar biz from chassis, bus body building
TI Cycles bets on exclusive franchisee route for growth
Kishore vows to stay in liquor biz
Mid-Day Multimedia mulls starting a national tabloid
Toyota may roll out small car for Indian market
Tata Motors February sales up 20 pc

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line