The world’s largest spirits maker, UK-based Diageo Plc, is set to buy a 53.4 per cent stake in India’s top liquor company, Vijay-Mallya led United Spirits Ltd (USL), for Rs 11,166.5 crore in a multi-structured deal.
The development, which marks one of the biggest ever stake sales by an Indian firm to a foreign company, comes at a time when Vijay Mallya is trying to overcome serious financial problems in his grounded Kingfisher Airlines, which has a debt pile of Rs 7,000 crore.
The stake acquisition in USL, which has a 43 per cent market share in India, will make this country the British company’s second largest market after America.
Mallya will stay Chairman of USL and UBHL but Diageo will get to choose the Directors on the Board, the CEO and the CFO.
After the deal’s announcement, shares of United Spirits on Friday closed 1.22 per cent higher at Rs 1,359.70 while United Breweries Holdings Ltd gained 3.34 per cent. USL had touched a one-year high of Rs 1,425 during the day.
‘NOT A SELL-OUT, HAS NOTHING TO DO WITH SAVING KINGFISHER AIRLINES’
‘This is not a sell-out, it’s my appreciation of needs...I have recognised the consolidation needs (of Diageo) and whole-heartedly appreciate it... I have not sold any family jewel but embellished it,’ Vijay Mallya told reporters at a conference call after announcing the deal. He added, ‘I do whatever is best for my businesses. I have done what is best for my beer and I have done what is best for my spirit business. I will do the best for the airline but separately... I will address the Kingfisher problems fairly and squarely. These are mutually exclusive.’
The development, which marks one of the biggest ever stake sales by an Indian firm to a foreign company, comes at a time when Vijay Mallya is trying to overcome serious financial problems in his grounded Kingfisher Airlines, which has a debt pile of Rs 7,000 crore.
The stake acquisition in USL, which has a 43 per cent market share in India, will make this country the British company’s second largest market after America.
Mallya will stay Chairman of USL and UBHL but Diageo will get to choose the Directors on the Board, the CEO and the CFO.
After the deal’s announcement, shares of United Spirits on Friday closed 1.22 per cent higher at Rs 1,359.70 while United Breweries Holdings Ltd gained 3.34 per cent. USL had touched a one-year high of Rs 1,425 during the day.
‘NOT A SELL-OUT, HAS NOTHING TO DO WITH SAVING KINGFISHER AIRLINES’
‘This is not a sell-out, it’s my appreciation of needs...I have recognised the consolidation needs (of Diageo) and whole-heartedly appreciate it... I have not sold any family jewel but embellished it,’ Vijay Mallya told reporters at a conference call after announcing the deal. He added, ‘I do whatever is best for my businesses. I have done what is best for my beer and I have done what is best for my spirit business. I will do the best for the airline but separately... I will address the Kingfisher problems fairly and squarely. These are mutually exclusive.’