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USL signs sale and franchise agreements for select Popular brands with Inbrew

Following the strategic review of selected Popular brands of United Spirits  Limited (“USL”), announced on 23 February 2021, the Board of Directors of USL today approved the  sale and franchising of selected brands to Inbrew Beverages Pvt Limited (“Inbrew”). The transaction  does not include the McDowell’s or Director’s Special brands, which will be retained by USL. 

USL and Inbrew have executed definitive agreements for the sale of the entire business undertaking  associated with 32 brands, including iconic brands Haywards, Old Tavern, White-Mischief, Honey Bee,  Green Label and Romanov, for a total cash consideration of approximately INR 8,200 million, subject  to customary adjustments. The sale portfolio covers the entire business undertaking associated with  the 32 brands set out below, including the related contracts, permits, intellectual property rights,  associated employees, and a manufacturing facility. In addition to the above, USL and Inbrew have  entered into a 5-year franchise arrangement for 11 other brands, including Bagpiper. USL has also  granted Inbrew a right, subject to certain conditions, to convert the fixed term franchise arrangement  into one with perpetual rights to use and/or a call option to acquire the brands at a pre-agreed  consideration. Certain ancillary agreements, including transitional services arrangements, in relation  to the sale of the business undertaking and the franchise and option agreements have been approved  to be executed between USL and Inbrew. 

Hina Nagarajan, Managing Director & CEO of USL, commented: “The transaction reflects the continued  evolution of the management of the Popular portfolio since 2016, when the company moved to a  franchise model in many states, to enable a sharpened focus on ‘Prestige & Above’. This is a significant  move to reshape our portfolio in service of our publicly stated mission to deliver sustained double  digit profitable top-line growth.” 

Ravi Deol, Chairman of Inbrew, said: “The acquisition of these iconic brands provides Inbrew with a  unique platform to extend its ambition of becoming India’s trusted household beverage company.  These brands have delighted consumers over generations, and we are excited at the prospect of  strengthening this legacy. Inbrew will revitalise these brands through expanded distribution,  innovation and investments. After the acquisition of Molson Coors’ beer business last year, we will  now participate in the mainstream spirits category, making Inbrew India’s diverse AlcoBev player.” 

The brands/ variants covered under the franchise agreement are the subject of a previously disclosed  encumbrance. The validity of the encumbrance has been disputed by USL on the basis that the  underlying loan has already been fully repaid (together with the accrued interest and all other  amounts). Pending the resolution of the ongoing dispute and the release of the existing encumbrance  over the franchised brands, the legal title to the franchised brands remains with USL. Following the  release of the existing encumbrance over the franchised brands, and subject to the exercise of the call  option by Inbrew, the Company will assign ownership of these brands to Inbrew. 

The Company expects to complete the transaction by the end of the quarter ending 30 September  2022. 

A copy of USL’s announcements to the Stock Exchange relating to the transaction will be available on  Bombay Stock Exchange and National Stock Exchange.


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