Balaji Distilleries Merger with United Spirits Effective April 1, 2009
United Spirits Ltd (USL) has announced the merger of Tamil Nadu-based Balaji Distilleries Ltd .The board of USL approved the all-stock deal and the merger will be effective April 1, 2009. The swap ratio fixed by the company is 2:55, i. e. two shares of United Spirits for 55 shares held in Balaji Distilleries.
Balaji Distilleries began in 1983 and has since been a contract manufacturing unit for UB group, with a distillery capacity of producing 10 million cases per annum and brewing capacity of 9 million dozens per annum.
It accounts for 60 per cent the company's beer volume in the state where United Spirits is a market leader with 59 per cent market share in the state's beer market.
Mr. Vijay Mallya, chairman of the UB group said the merger would de-risk the company's earnings and help it consolidate its leadership position in large and growing market. Shares of the company closed up Rs 16.55, or 2%, at Rs 846 at BSE.
