Brandy boss Tilaknagar eyes Imperial Blue in $600 million whisky chase

Tilaknagar Industries
, the maker of
Mansion House
and
Courrier Napoleon brandies
, is the frontrunner in the race for the
Imperial Blue
whisky brand being sold by the French alcobev major
Pernod Ricard
, people familiar with the matter told ET. The brand has an estimated enterprise value of up to $600 million, and a deal will mean the largest
M&A in India's liquor industry
in more than a decade after
Diageo
's buyout of United Spirits in 2013 for $1.9 billion.
Inbrew Beverages
, established by London-based serial entrepreneur Ravi Deol, is also in the reckoning. However, Pernod Ricard has found Tilaknagar's offer to be better, the people said, though Inbrew is not completely out of the running.
As preferred party, Tilaknagar, which is India's fifth-largest alcoholic beverage firm by market cap, has been asked to submit a binding bid by June 23, the people said.
Adding shine to brand, expanding portfolio
Any potential deal will be financed through a combination of internal accruals, bank borrowings and private equity funding, they added. Japan's Suntory Holdings, owner of Jim Beam and Maker's Mark whiskies, initially showed interest in Imperial Blue but decided not to pursue the deal, they added.
For homegrown Tilaknagar, led by Amit Dahanukar, a successful acquisition of Imperial Blue would help expand its brand as well as non-brandy portfolio. While brandy is a dominant category in Tilaknagar's portfolio, the company forayed into whisky in 2012, leveraging flagship brand Mansion House. However, more than 90% of its sales still comes from brandy.
During its earnings call on May 21, chairman and managing director Dahanukar said Tilaknagar will focus on enhancing its presence within brandy and other Indian made foreign liquor (IMFL) categories through its own brands and strategic investments.
Tilaknagar Industries
has earlier acquired Round The Cocktails, Spaceman Spirits and Incredible Spirits.
'We regret we are unable to comment on the subject,' Dahanukar said in response to ET's query on the proposed deal.
Imperial Blue ranks as the eighth bestselling whisky worldwide. In 2023, it sold 22.8 million nine-litre cases, according to Drinks International Millionaires' Club. Although these numbers are strong, sales are down from 2019, when it sold 26.3 million nine-litre cases.
Imperial Blue was introduced in India by Canadian distiller Seagram in 1997. In 2001, Seagram sold its global business to Pernod Ricard and Diageo. The French company then took over the Indian business. In 2002, Pernod Ricard relaunched Imperial Blue with the advertising slogan 'men will be men.'
Its success has grown year on year, making it Pernod Ricard's largest brand by volume, according to the company's website. Much of its success is credited to its memorable advertising line, which created a strong following in India.
Selling Imperial Blue marks a change in focus for Pernod Ricard in the region. It aims to grow its premium brands like Glenlivet, Jameson and Chivas Regal.
'Pernod Ricard regularly reviews strategic options for its development, including its brand/business portfolio," said a company spokesperson, while declining to comment on the proposed deal.
This move mirrors how UK drinks company Diageo sold 32 low-margin Indian brands, such as Haywards, Old Tavern, White Mischief, Honey Bee, Green Label and Romanov, in 2022 for ₹820 crore. The brands were bought by Deol's Inbrew. Deol is famous for starting Barista Coffee in 1999, which made him known as India's coffee man.
By acquiring a stake in Imperial Blue, Inbrew aims to become one of the leading players in the industry. The company could not be reached for immediate comment.
People aware of developments said Imperial Blue's valuation, among other factors, is also compared with listed drinks companies' valuations, which are 20–30 times operating profits. When estimating the value of a target asset, the discounted cash flow method is also used. This method values an investment by considering future cash flows.

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