The acquisition of Shaw Wallace & Company and Herbertsons Ltd. is a part of the UB Group's strategy to consolidate the spirit business and globalize its presence.

Liquor baron Vijay Mallya's UB Group clinched two important deals in March 2005, which have made it the world's second largest spirit maker after UK's Diageo Group in terms of volume. It acquired a 54.54% stake in Shaw Wallace & Company Ltd. (SWC) and a 49.06% stake in Herbertsons Ltd. (HL). These acquisitions seem to be a part of its strategy to consolidate the spirit business and globalize its presence.

The UB Group made an open offer that forced the Chhabrias-controlled SWC to divest its controlling stakes. The company acquired the controlling stakes of SWC for Rs. 325 per share, which included a fee for worldwide `no-compete' undertaking. The open offer price, however, was Rs. 260. The deal is considered as one of the largest and ferocious takeover-rivalries in the Indian corporate landscape. As a result of SWC's acquisition, the UB Group now holds a 60% market share of the Rs. 10,000 cr Indian liquor business. However, it is difficult to say whether the deal is expensive or not. That is because SWC is reeling under various tax disputes and the deal comes under the purview of the Monopolies and Restrictive Trade Practices Commission (MRTPC). After acquiring 49.06% stake in HL, the UB Group now has a 92.21% stake in HL.

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