Diageo buys 53.4% stake in United Spirits for Rs 11,166 crore

Diageo Plc has agreed to buy a 53.4 per cent stake in liquor baron Vijay Mallya's United Spirits Ltd for more than $2 billion, according to an internal memo related to the deal obtained by Reuters.
The purchase marks the biggest inbound Indian M&A deal since British oil firm Cairn Energy Plc's agreed to sell a majority stake in its Indian business to Vedanta Resources Plc last year. The Diageo deal concludes an on-again, off-again courtship that began in 2008.








The purchase would ramp up Diageo's presence in the world's largest whisky market, while Mallya will gain much-needed cash to reduce United Spirit's debt although it may not be enough to revive his grounded Kingfisher Airlines Ltd.

The two companies said in September that they were in talks about a possible deal.

"United Spirits and Diageo Plc confirm that the UK-based company is in discussion with it and United Breweries Holdings in respect of possible transactions to acquire an interest in the liquor firm," United Spirits had said in a filing to BSE.

The purchase marks the biggest inbound Indian M&A deal since British oil firm Cairn Energy Plc's agreed to sell a majority stake in its Indian business to Vedanta Resources Plc last year. The Diageo deal concludes an on-again, off-again courtship that began in 2008.

The purchase would ramp up Diageo's presence in the world's largest whisky market, while Mallya will gain much-needed cash to reduce United Spirit's debt although it may not be enough to revive his grounded Kingfisher Airlines Ltd.

The two companies said in September that they were in talks about a possible deal.

"United Spirits and Diageo Plc confirm that the UK-based company is in discussion with it and United Breweries Holdings in respect of possible transactions to acquire an interest in the liquor firm," United Spirits had said in a filing to BSE.

Meanwhile, shares of United Spirits surged 6 per cent to a 52-week high on 9 November following reports that Vijay-Mallya led UB Group has reached a deal with the world's largest spirit maker Diageo for stake sale in the company.

After opening strong, shares of USL further jumped 6 per cent to Rs Rs 1,425 -- its highest level in a year on the BSE.

At NSE too, the scrip gained 6 per cent to touch a 52-week high of Rs 1,425.

In September, United Spirits had confirmed that it was in talks with UK-based Diageo Plc for a stake sale.

USL is the world's second largest spirits maker after Diageo and markets various liquor brands including Signature, Bagpiper, Antiquity, Royal Challenge, Signature in the country.

Mallya-led United Breweries Holdings Ltd (UBHL), the promoter of USL, holds 18.03 per cent stake as on September 30.