MGM may merge liquor business

BANGALORE/CHENNAI: Flamboyant serial entrepreneur Ramesh Vangal’s liquor story may see him script a significant merger and acquisition (M&A) move in southern markets. The Vangal-promoted two-year-old start-up, Mason & Summers, and Chennai-based MGM Group are in talks for joining their liquor forces, said informed sources.

MGM may pick up a critical stake in Mason & Summers in return for merging its liquor assets with the Vangal company, said the sources. The quantum of stake MGM would take or the valuation of the likely deal could not be ascertained at this point.

MGM’s two distilleries in Tamil Nadu and in Andhra Pradesh and liquor sales under the umbrella MGM brand estimated at 4m cases could enter the Mason & Summers fold if talks progress. Mason & Summers declined to comment, while MGM termed the report false and denied any discussions with Ramesh Vangal in this regard. However, sources within the MGM Group had confirmed that talks were on between the two camps.

It must be mentioned that Mr Vangal, through his marine infrastructure interests, already has business ties with the Maran family’s logistics business. The latest move to extend the ties to the liquor business is seen as a synergistic move for both players — the Maran family seeking a larger national role in the growing liquor market, and Mr Vangal looking for critical assets and volume to spur his spirits venture.

If the deal making works, it will be Mr Vangal’s second significant transaction in the liquordom in recent times. Earlier, he struck a bottling and distribution pact with Mohan Meakin for brands like Old Monk Rum and Solan Whisky. He is also in the reckoning for picking up a 51% stake in Meakin’s beer business, the bidding process for which has entered the final stage. If it fructifies, these deals could overnight raise Mr Vangal’s profile in the domestic
alcoholic beverage industry.

Mason & Summers operates with a portfolio that include brands like Royal Crown Whisky, Glen Drummond Single Malt and Wild Horse Whisky and Brandy. The company, which seems to have a tactical understanding with Thailand’s alcoholic beverage giant Pacific Spirits, currently rolls out products through contract bottling arrangements. Incidentally, both Mason & Summers and MGM have been working on projects to roll out locally bottled scotch whiskies through import of bulk scotch. Pacific Spirits controls Inver House, one of the world’s largest suppliers of bulk scotch.