Guinness Bids $3.2 Billion for Scotch Distiller

LONDON —  The British brewing group Guinness, known worldwide for its dark Irish stout, and Distillers, Scotland’s whisky giant, Monday agreed to a $3.2-billion merger agreement, the biggest in British history.

Distillers has been fiercely fighting a hostile takeover bid by another firm since last month.

Industry sources said the Guinness proposal had been recommended to Distillers’ management by its institutional shareholders to ensure that it escaped the $2.6-billion bid from the Argyll food retailing group.

The merger plan was promptly and unanimously accepted by Distillers’ board.

Distillers’ Scotch whisky brands include Johnnie Walker and White Horse. The merger, which will give Guinness an estimated 40% of the British domestic trade in whisky, could also make it the biggest exporter of Scotch.

Guinness already owns Distillers’ competitor Arthur Bell, which it bought last year.

Guinness, whose value is put at half that of Distillers, is offering eight of its ordinary shares and $10 in cash for every five shares of Distillers. This values each Distillers share at $8.90.

A Guinness statement said Distillers’ shareholders could receive a cash alternative of $8.32 per share.

Full acceptance of the share and cash offers would involve the issuance of about 581 million new Guinness shares and the borrowing of about $724 million in cash.