American spirits company Sazerac may hike John Distilleries stake to 60%

Sazerac, the fourth largest American spirits company, is in advanced talks to increase its stake in Bengaluru-based John Distilleries from 43 per cent to a majority stake of 60 per cent.  
 

If it goes through, it will be amongst few such deals involving a foreign liquor company taking a majority stake in an Indian liquor company since Diageo bought a majority stake in Vijay Mallya’s United Spirits in 2012.
 

As part of the terms being discussed, the management of the privately held company will continue to be run by its Indian promoter Paul P John, who set up the company in 1996 and is currently the chairman.
 

John Distilleries is the fourth largest liquor company in the country by volumes. Production is spread across 12 locations and eight states. Its flagship brand Original Choice is among the largest selling popular whiskey brands in India and among the top 10 selling whiskeys in the world with sales exceeding 11 million cases annually.
 

It also has a range of other brands in brandy, rum, premium wines, and single malts. These include the premium Paul John single malt, which is sold in 30 countries.   
 

A John Distilleries spokesperson, when queried on the talks, said: “We regret that we cannot divulge any details as requested.”

An email to Sazerac in the US did not elicit any response.    
 

If the deal goes through, Sazerac will be following in the footsteps of its competitor Diageo (the number one spirits company in the US) when it became the first foreign company in India to buy a majority 53.4 per cent in United Spirits for $2 billion in 2012.

In 2020, Diageo increased its stake to 55.9 per cent.
 

Sazerac is owned by billionaire William Goldring. In 2017, the company initially made an entry into India by buying a 28 per cent stake from Gaja Capital, one of the investors in John Distilleries. The plan was that Sazerac would buy another 15 per cent from Gaja in two years. However, the remaining stake of 57 per cent is controlled by Paul John, who is now planning to sell 17 per cent.   
 

Sazerac has a 400-year-old history going back to 1630 when it began making cognac in France. It has over 450 brands which include spirits, cocktails and whiskeys. Among its top brands are bourbon whiskeys such as Old Rip Van Winkle, Southern Comfort, and W.L Wheeler. Its operations span over 103 countries.
 

In 2023, for the first time ever, Indian single malts – Paul John, Amrut, Indri, Rampur - beat famous global brands by capturing 53 per cent of the Indian market. India is one of the largest markets for whiskeys in the world.

 

Rare blend    

In 2017 Sazerac bought 28 per cent in John Distilleries from Gaja Capital
 

In two years, it bought back another 15 per cent from Gaja, taking it to 43 per cent
 

Paul John currently holds 57 per cent in the privately held company
 

In 2023, according to Statista, the gross revenue   of John Distilleries was Rs 63 billion  
 

Its best-selling brands include Original Choice and Paul John single malt