Guinness Will Buy Schenley Spirits Business : $500-Million Deal to End Dewar’s Dispute

Guinness PLC said Thursday that it will buy most of Schenley Industries’ wine and spirits business--including its prized U.S. distribution rights for Dewar’s and Gordon’s liquors--from the Riklis family for about $500 million.

Schenley, the American distributor of several key Distillers Co. brands, was a bit player in the drama surrounding the Distillers takeover last year when it threw its support to Guinness in the merger battle, analysts said.

Industry analysts noted that Guinness’ acquisition of Schenley ends a dispute over Schenley’s ownership of the Dewar’s U.S. distributorship, which had first surfaced before the takeover battle.

Focus on Core Businesses

The acquisition also means that Guinness will gain the right to distribute its own Anglo-Irish stout beer, Guinness, in the United States. Schenley is the U.S. distributor for Guinness products and also owns various wine and spirits brands that have a small U.S. market share.

Guinness said the Schenley acquisition is part of a strategy to become a major force in the world’s beverage industry. The brewer said it will continue to divest retail interests and concentrate on the core businesses in spirits and brewing.

A key move to bolster its drinks business, the bid last year for Distillers Co., prompted a British government probe of the affairs of Guinness’ bid tactics. No report has been issued, and no date has been set for the completion of the inquiry.