Distell Group, a leading liquor producer in South Africa, is in negotiations with India-based Tilaknagar Industries to acquire a few of latter’s brands.
Tilaknagar Industries, which has INR 8bn- ($128m) debt, expects to generate INR2.5bn to 3bn ($40m-$48m) from the sale. It has been holding talks with investors to raise funds.
The Indian firm has already negotiated with both Suntory and Pernod Ricard for the sale of a minority stake. However, the talks did not materialize into a deal, reported Business Standard.
Tilaknagar Industries is engaged in a legal tussle with Kishore Chhabria's Allied Blenders & Distillers over marketing rights for the Mansion House brandy.
In 2014, Allied Blenders wanted to purchase Tilaknagar Industries but the negotaitions were not successful.
Tilaknagar Industries chairman and managing director Amit A Dahanukar was quoted by the financial daily as saying: "We confirm our company is raising funds. This could be through a sale of non-core assets."
Established in 2000 in South Africa, Distell owns brands such as Klipdrift, Richelieu, Viceroy (brandy), Bisquit, Richelieu XO (Cognac), Bain's Cape Mountain, Knights, Harrier, Three Ships (whisky), Amarula, and Nachtmusik (liqueur)
With the acquisition of some of the brands from Tilaknagar, Distell expects to gain a strong foothold in the Indian liqour market.
Considered to be the third largest in the world, the Indian liquor market is valued at $35bn and is growing at 4% annually.
