The undisputed Indian beer king Vijay Mallya who owns the largest Indian brewery, United Breweries along with Scottish and Newcastle of UK, is well on his way to become the wine king. The group is seeking to acquire Domaine Carneros in Napa Valley, California, according to a report in Economic Times today.
It appears that Vijay Mallya, whose favourite bubbly must be Taittinger – a Sula import, is settling for sparkling wine in the absence of champagne. A couple of months ago, he had made a statement by bidding for the Champagne Taittinger group. It was a deal he could not lay his hands on, as he was frustrated by French Bank Credit Agricole with its last minute bid of US $ 800 million.
The California property is part of the assets owned by the group and the Bank is apparently looking to divest it. Speculation is rife that Credit Agricole du Nord Est, a unit of the French Bank that had struck the deal along with a member of the Taittinger family, the original promoter of this leading house of the Champagne district. Reportedly the transaction was made primarily to own the champagne business.
After his offer was spurned, Mallya had settled for Taittinger's Loire Valley winery, Bouvet Ladubey for US $ 15 million. It plans to import and market their wines India. The prospect of cornering the Carneros will give a foothold to UB in California. The group is close to buying a winery in South Africa and is eying businesses in Australia as they offer good valuations due to the glut and marketing crisis in the wine industry, adds the report.
UB is already establishing itself in the Indian wine industry with a domestic winery coming up in Baramati, Maharashtra. It plans to import the Ladubey wines from France in bulk and bottle at this facility at a later date..
The company is planning to increase its borrowing limits from the existing Rs. 700 Crores to Rs. 1500 crores ( US $ 325 million). A resolution to this effect comes up in the Shareholders' AGM today. Though the increase is primarily for the expansion of the beer production capacity, it will help King Mallya's wings further and he may be on his way to become the Emperor of the beer, wine and spirits industry.
September 19, 2006