CCI wants Diageo, USL to rework ambiguous parts of deal
Sources said CCI wants more clarity on two clauses in the Diageo-USL deal announced on November 9. These clauses pertain to the sale of additional shares by United Breweries Holding (UBHL) to Diageo in case the preferential allotment by UBHL to Diageo is not successful or is not approved by USL shareholders. Also, a clause which states that UBHL will vote its remaining shareholding in USL to Diageo in case it fails to get a majority stake in USL even after share purchase, preferential allotment and tender offer, sources said.
CCI has also sought information from the companies as per the provisions of Section 20(4) of the Competition Act, 2002.
It wants to know the relative advantage or an adverse effect on competition after the deal is through. CCI will also examine whether the benefits of the acquisition will outweigh the adverse impact of the combination, if any, said a competition law expert.
CCI has also asked the companies to rework the ambiguous parts in their deal and make it more definitive in nature. “The commission may send back the application if the companies are not able to address the concerns. If that happens, the matter will enter 'stage-II'. In that case, CCI can take up
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