UB group's McDowell & Company has acquired up to 54.54 per cent stake in Shaw Wallace and Company from Chhabria's Jumbo World Holdings for over Rs 1,300 crore ($300 million).
The agreed purchase price signed under a binding agreement includes a value of Rs 325 per SWC share, which includes a fee for worldwide non-compete undertakings, the UB group said in a release on Monday.
The transaction enables the UB group to have a significant share of the Indian spirits business with an annual sales of about 60 million cases, which makes it the second among the global spirit companies.
Consequently, McDowell and parties in concert propose to revise the open offer for SWC shares to reflect a change of control pursuant to the proposed acquisition.
It also proposes to increase the open offer price from Rs 250 per share to Rs 260 per share, adjusting for the non-compete fee as under SEBI regulations, it said.
The UB Group has also agreed to purchase certain other affiliates of the Jumbo Group who are also engaged in the distribution of spirits in India and abroad.
UB Group chairman Vijay Mallya said the transaction was a culmination of a long journey which would benefit shareholders of McDowell and SWC and economies of scale would result in significant cost advantages of consumers.
SWC is primarily engaged in spirits business comprising both Indian Made Foreign Liquor and country liquor.