India's UB Group, the world's third-largest maker of spirits, announced yesterday it is buying Whyte & Mackay for £595m in an all-cash deal that will expand the market for the Glasgow-based distiller's brands in the booming, emerging economies of Asia.

"Demand for Scotch whisky in emerging economies is coming back stronger than ever," said UB chairman and chief executive Vijay Mallya, adding that the group already has a large distribution network in India and China.

Both countries have seen economic growth rocket in recent years and have an expanding middle class that is hungry for western goods.

United Spirits, a division of UB, this month introduced five products in China, including the most expensive Indian-made whisky, Antiquity Blue Rare Premium, its best-selling Bagpiper brand and Premium Romanov Vodka.

Middle-class Chinese are becoming familiar with imported spirit brands such as Chivas Regal whisky and Martell cognac. That helped the nation to become one of the top 10 export markets for Scotch whisky last year with about £57m worth of imports, a 27% gain on 2005.

The Whyte & Mackay acquisition, which has taken about a year to complete, will also help UB Group add Scotch whisky to "fill a gaping hole" in its wide-ranging portfolio of products, Mallya told a packed news conference at a Glasgow hotel.

United Spirits, India's biggest liquor maker, will acquire all the shares in the Glasgow company held by chairman Vivian Imerman and other investors.

Mallya said expanding the Bangalore-based UB empire to Scotland will also add to UB's earnings, in an apparent reference to criticism that he might be overpaying for the buy.

He said he planned to meet UB's Indian institutional shareholders today to outline details of the takeover.

The Scotch Whisky Association, which helps promote whisky around the world, welcomed the deal and said it was "looking forward to working closely with Whyte & Mackay's new owners".

Mallya reassured Whyte & Mackay staff that their jobs were safe, adding that Imerman will remain with the group as a "strategic adviser". Whyte & Mackay employs more than 500 people on sites around Scotland.

Mallya emphasised that UB has a code of conduct whereby it treats its employees well. "We don't believe in being the classical hatchet man."

The billionaire business leader, whose Kingfisher beer brand is widely available in Indian restaurants and in the UK, said UB plans to increase capacity at Whyte & Mackay's present facilities and could buy more distilleries.

"You should not be surprised if we look at other acquisitions in the future," he stated.

He added that UB was considering seeking a listing on the London Stock Exchange, but did not say when this might happen.

He said listing UB on an overseas exchange was important because it could help the group raise additional capital to finance further takeovers.

"We want to grow the business and make it more international."

Shares of United Spirits rose 7% to 896.85 rupees (£10) in trading on the Bombay Stock Exchange.

Imerman and his brother-in-law, London-based tycoon Robert Tchenguiz, were part of a group of investors who paid £208m for Whyte & Mackay in 2001, before taking over full control two years ago.

He said: "With the UB Group's ability to sell and market brands, Whyte & Mackay will be taken to a new level.

"Its annual operating income is now approximately £50m and I expect it to grow at the rate of 20% plus per annum for the foreseeable future.

"Vijay is a world-class businessman with honour, integrity, flair and a great instinct for business."

Mallya said UB would take a look at some of Whyte & Mackay's less well-known brands and may re-launch some of them.

He mentioned, as an example, the company's Vladivar vodka brand as one that might be revamped.

Whyte & Mackay, which sold a record nine million cases in the past year, commands close to 10% share in the worldwide market for Scotch whisky. It also has a large stock of aged single malt whisky.

Its brands include The Dalmore, Isle of Jura, Glayva, Fettercairn, Mackinlays, John Barr, Cluny and Claymore among others.

The UB Group is one of the country's biggest conglomerates with interests in distilling, brewing, real estate, fertilisers and aviation among others.