Diageo plc (DEO) to Sell Whyte & Mackay Assets

Leading brewer, Diageo plc (DEO), has offered to divest most of its Whyte & Mackay assets to address concerns of the U.K. regulatory watchdog, Office of Fair Trading (OFT).

U.K.-based brewer, Diageo got control of Whyte & Mackay when it acquired Indian spirits company, United Spirits in 2012. Diageo and United Spirits are the major suppliers of blended whisky to retailers in the U.K. and across the world. In fact, Diageo’s lower-end Bell’s whisky directly competes with Whyte & Mackay’s branded Scotch whiskey. Hence, OFT expressed concerns as several retailers were worried that a merger between Diageo and United Spirits will reduce competition, giving a chance to Diageo to raise prices for bottled blended whiskey in the U.K.

In order to address the concerns of the regulatory authority, Diageo, has offered to sell Whyte & Mackay’s Invergordon, Jura and Fettercairn distilleries while retaining Dalmore and Tamnavulin.

Up-and-Coming Small- and Mid-cap Portfolio Managers #MICUS (Morningstar Conference)

InvestorsNotes from Laird Bieger of Baron Capital, Mark Wynegar of Tributary Capital Management, and Amy Zhang of Alger Funds' presentation from the 2020 Monringstar Investment Conference. Q2 2020 hedge fund letters, conferences and more Up-and-Coming Small- and Mid-cap Portfolio Managers Our manager research team has been publishing its semiannual Morningstar Prospects report for several years. Read More


United Spirits bought Whyte & Mackay in 2007 for $1.2 billion. In the U.K., Whyte & Mackay primarily supplies whisky, but owns and distributes other spirits, including vodka, as well.

Diageo is increasing marketing investment in all its geographical segments, and is focusing more on the premium brands. The strategy of transitioning to high-margin high-priced products is helping the company improve its margins.

Currently, Diageo carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the same sector include Constellation Brands Inc. (STZ), Omega Protein Corporation (OME) and Synutra International Inc. (SYUT). All these stocks carry a Zacks Rank #1 (Strong Buy).

DIAGEO PLC-ADR (DEO): Free Stock Analysis Report

OMEGA PROTEIN (OME): Free Stock Analysis Report

CONSTELLATN BRD (STZ): Free Stock Analysis Report

SYNUTRA INTL (SYUT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research