Following press speculation earlier this week, Glenmorangie today confirmed that the main shareholders were looking for a buyer for their stake, which is in excess of 50 per cent, and that the board had therefore instructed its financial advisor, Rothschild, to seek offers for the company.
"The company is in preliminary discussions with a number of potentially interested parties, which may or may not result in an offer for Glenmorangie," the firm said in a statement.
Glenmorangie, which overtook Glenfiddich last year to become the biggest-selling malt whisky in the UK with volumes in excess of 2 million cases, is thought to worth around £300 million. Sold in over 120 countries, the brand is one of the best known in the Scotch whisky industry, as well as the number one in its home country.
The group also produces the Ardbeg and Glen Moray malt brands, and blends The Bailie Nicol Jarvie, James Martin's and Highland Queen.
As for potential buyers, the sheer size of the company rules out a number of leading drinks groups such as Diageo or Pernod Ricard, whose own Scotch whisky businesses (which include malt brands such as Laphroaig and The Glenlivet, respectively) are large enough to lead to competition concerns if they were to bid for Glenmorangie.
As a result, a company without a major Scotch brand is perhaps the most likely to acquire Glenmorangie - and capture a sizeable share of a fast-growing market to boot. The 111-year old company already has a partnership with two such companies - rum-maker Bacardi and Brown-Forman (owner of Jack Daniel's) - having joined forces with the two larger groups in 2000 to help develop its business overseas.
These two firms would certainly be top of the list of potential candidates to acquire Glenmorangie, having the financial clout, knowledge of the company and the international distribution network to maximise the potential of the Glenmorangie name - as well as only a limited presence in the Scotch whisky market (Bacardi owns the Dewars Scotch brand).
Bacardi Martini already distributes Glenmorangie in Germany, Spain, the Netherlands, Austria, Switzerland, France, Italy, Belgium and Portugal, as well as the UK, and also distributes Ardbeg in Germany, Switzerland and the Netherlands, although the distribution agreement in 2000 was in fact signed with Brown-Forman. The US group's brands (Jack Daniel's and Southern Comfort) are distributed in most European markets by Bacardi-Martini, however, making the rum maker the obvious choice to market the Scotch brands as well, in the European market at least.
The strength of these two companies in the US - the biggest single export market for Scotch whisky, with sales of £329 million there last year - could also be a telling factor.
Whoever acquires the business, it will garner a major share of a malt whisky market which continues to go from strength to strength. Figures from the Scotch Whisky Association show that malt whisky exports increased by 13.5 per cent in 2003, breaking through the £300 million barrier for the first time. Total Scotch whisky exports both blended and malts, reached £2.37 billion in 2003, the second best performance ever, with malts proving particularly popular in 'new' whisky-drinking nations in eastern Europe and Asia.