India's spirits majors seem to be getting a high on overseas acquisitions. Even as Vijay Mallya-owned UB scouts for big ticket buyouts in the UK, the country's second largest spirit company, Radico Khaitan, has hit the acquisition trail in Europe.

The company, which is seriously looking at overseas expansion through inorganic route, is in talks with two to three spirit manufacturers in Europe. Apart from acquiring a unit, the company is looking at buying out established European brands, said a senior company executive.

"We have mandated a leading consultant on the job to identify suitable targets in Europe," said Abhishek Khaitan, MD.

The company is keen to grow in the domestic market by acquiring few national brands in the premium spirit segment, he added. Radico has recently proposed floating a foreign currency convertible bond issue of $100 million to fund the acquisitions.

A source close to the development said the company was in the final stages of discussions with a Scottish company for a possible buyout. Rabo Bank is advising Radico on the acquisitions, the source added. Since the company's financial position is quite comfortable in terms of cash reserve and debt raising capability, there will not be any funding constraints, the source said.

In the domestic front, Radico was recently granted exemption from export duty for three years for its upcoming grain-based distillery at Rampur, Uttar Pradesh. The tax relief was allowed on the recommendation by the Investment Promotion Board of Uttar Pradesh. 

The distillery will help the company in its endeavour in the US and European markets, where whiskies are made of grain, not molasses, said an analyst.

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