South Korea: Hitejinro considering acquisition of Windsor whiskey from Diageo

Hitejinro, Korea's largest liquor producer, is considering acquiring Windsor, the whiskey brand owned by British liquor giant Diageo, for 200 billion won ($150.5 million) after the sale of the business to a local private equity firm fell through last year, the Korea JoongAng Daily reported on September 11.

"We are presently reviewing the acquisition of Windsor Global," Hitejinro stated in a regulatory filing on the Data Analysis, Retrieval and Transfer System (DART) website, operated by the Financial Supervisory Service, adding, "No decision has been made.”

"We plan to provide more specific details once they are confirmed, either upon confirmation or within the next month," it said.

The entire stake of Windsor Global is up for sale, which is currently held by Netherlands-based Diageo Atlantic B.V. Diageo operates separately in Korea under the entities Diageo Korea and Windsor Global.

Diageo tried to sell the Windsor whiskey brand last year, but the deal did not go as planned.

In March 2022, Diageo entered into a stock purchase agreement (SPA) with a domestic private equity consortium comprised of Bayside Private Equity and Metis Private Equity, agreeing to sell the operating rights of Windsor for 200 billion won. The agreement included a condition where Diageo would supply the Scotch whisky concentrate to the consortium for a decade, but the consortium failed to meet the acquisition payment deadline and the deal was dissolved.

Whiskey, once associated primarily with an older demographic, has experienced increased popularity among the younger generations in Korea, driving the recent overall growth in the country's whiskey market.

Whiskey consumption in Korea surged by 46 percent compared to the previous year, recording the highest growth rate globally, according to recent data from Euromonitor International. Total whiskey sales in the country reached 14.2 million liters over the past year.

Hitejinro has a strong presence in the domestic soju and beer markets with brands like Chamisul and Terra. However, the company has yet to establish a significant presence in the spirits sector. As part of a strategic diversification effort, Hitejinro recently entered into an agreement with the French cognac producer Hardy and started selling its premium Lalique 4 Seasons and Lalique Caryota lines from Sept. 6.

11 September, 2023