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Mergers, Acquisitions and Takeovers Case Study

Case Title:

United Spirits' Acquisition of South Indian Balaji Distilleries: A Smart Move?

Publication Year : 2010

Authors: S Acharya, L Ravi, S Gollapalli

Industry: Beverages


Case Code: MAA0220IRC

Teaching Note: Not Available

Structured Assignment: Not Available

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United Spirits Limited (USL) is the largest spirits manufacturer in India, and the world's number three. This Indian start-up has a strong domestic, as well as international presence. However, in the state of Tamil Nadu (a state in India), which accounts for 18% of its beer business, it does not have its own manufacturing unit, but has had a contract manufacturing unit, Balaji Distilleries for the last 25 years. BDL was declared unviable by BIFR (Board for Industrial and Financial Reconstruction) for posting losses consecutively for four years. In December 2008, as an expansion initiative, USL acquired BDL in Tamilnadu. It remains to be seen whether this acquisition would yield the envisaged synergies for USL. What will be the prospects and challenges of this backward integration move?

Pedagogical Objectives:

  • To study the initiatives of United Spirits to strengthen their presence in the domestic market.
  • To analyse the strategy of expansion through backward integration.

Keywords : Indian Brewery industry, United Spirits, UB Group, Vijay Mallya, Major players, Acquisition as a market entry strategy, Prospects, Challenges

Contents : 
Thomson and Reuters – An Overview
Thomson-Reuters – After the Merger
The Synergies
The Merger

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