United Spirits' Acquisition of Whyte & Mackay*

Details

Case Code : CLBS085
Publication date : 2009
Subject : Business Strategy
Industry : -
Length : 03 Pages
Price : Rs. 100

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Key words:

United Breweries Group, United Spirits, Whyte & Mackay, Vijay Mallya, Vivian Imerman, Scotch whisky, premium liquor, merger, acquisition, Diageo, Pernod-Ricard, countervailing duty

Note

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 

Abstract:

In May 2007, United Spirits acquired Scottish company Whyte & Mackay, becoming the second largest liquor company in the world. This caselet discusses the details of the acquisition, and the benefits expected to accrue to both the companies. United Spirits acquired a strong global distribution network through the acquisition, and Whyte & Mackay gained access to emerging markets, where the demand for Scotch whisky was high. However, proposed changes in the duty structure on imported spirits in India had the potential upset the companies calculations.

Introduction In May 2007, Beiersdorf AG, the German company which owns Nivea, a major global skin and body care brand, launched a new line of products under the 'Nivea for Men' name in India. The Nivea for Men line included two new fairness products - a Whitening Moisturizer and Multi-White Whitening Facial Foam. (In addition to the whitening products, the Nivea for Men line also included Deodorant Aqua Cool, Multi Protecting Facial Foam, Moisturizing Shaving Foam, and Shaving Gel.) The launch of the Nivea for Men line in India marked the company's entry into the male grooming segment in the country.

In India, Nivea had been primarily known for its moisturizing creams. The launch of the new line was supported by extensive promotional activity, including television and print advertising, as well as a large number of point-of-sale activities.

The early 2000s had witnessed an increased interest in personal grooming among men. According to analysts, men were becoming more conscious of their looks, as in the business world as well as in society, a lot rode on how a person presented himself. Ill-groomed men ran the risk of coming across as shoddy and irresponsible...