Liquor major UB Group Tuesday announced completion of the financial deal to acquire rival Shaw Wallace and Company Ltd., becoming the second largest spirits company in the world.

The UP Group has paid Rs.15.45 billion for a 75 percent stake in Shaw Wallace and Company. The total fund outgo involves Rs.3.12 billion for 25 percent stake acquired through an open offer.

"It (the acquisition) gives us the scale and size to think differently, become a really world-class organisation and look beyond the borders of India as well," said Vijay Mallya, chairman of the UB Group.

"After the financial closure, we can now accelerate the integration of the businesses of the UB Group and Shaw Wallace and move towards the creation of a unified spirits firm," he told a press conference here.

"The benefits of the business combination for consumers, suppliers, shareholders and other stakeholders are enormous."

According to Mallya, the UB Group and Shaw Wallace combined entity will sell 60 million cases of liquor in the current fiscal year ending March 31, 2006.

Mallya said the retail sales value of 60 million cases would be in the excess of Rs.140 billion.

The combined business entity would have 140 brands, of which 12 are millionaire brands. The products will be manufactured in 75 locations across the country.

Mallya said the integration of operations of the UB Group and Shaw Wallace would commence immediately.                  

The process of formal merger of the various entities will be started in about 60 days, he said, adding that professional advisors have already been mandated to draw a roadmap for a legal merger.

After the completion of the legal merger by end of the calendar year, the combined entity will be christened as United Spirits Ltd.

"We have positioned ourselves in a manner where we can create huge value for our stakeholders," said Mallya, adding the UB Group would continue to explore acquisition opportunities overseas.  

"The spirits industry in India has recorded double digit growth in the last 10 years and this is likely to be sustained in the coming years as well," he said.