Diageo set to take over Mallya’s United Spirits in Rs 11,166-cr deal
In the biggest inbound acquisition deal after UK’s oil firm Cairn Energy sold a majority stake in its Indian business to Vedanta Resources Plc last year, the UK firm and UB group firms — United Breweries (Holdings) Limited and United Spirits Limited — have signed an agreement under which Diageo would acquire a 27.4 per cent stake in USL, the leading spirits company in India. The consideration will be Rs 1,440 per share and the total cost for this stake would be Rs 5,725.4 crore (around 660 million pounds). Mallya will continue in his current role as chairman of USL, and UBHL and he will work with Diageo to build the USL business.
Diageo has also announced that it will launch a tender offer to the public shareholders of USL to acquire, at a price of Rs 1,440 per share, a maximum of 3.77 crore shares, which equates to 26 per cent of the enlarged share capital of USL.
On completion of the share purchases and in the event that the tender offer were fully subscribed, Diageo will hold 53.4 per cent of the enlarged USL share capital at an aggregate cost of Rs
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