INDIA: Diageo breaks 50% control of United Spirits
Diageo started its pursuit of United Spirits in late-2012
The UK headquartered beer, wine and spirits company, which secured a takeover deal with United Spirits in November 2012, said earlier today (2 July) that it has completed its latest tender offer, for 26% of the firm's shareholding. The latest transaction brings Diageo's total holding to 54.78%.
Diageo accepted the tender of just under 37.8m shares at a price of INR3,030 per share, which equates to INR114.49bn (US$1.91bn).
“India has now become one of Diageo’s largest markets and will be a major contributor to our growth ambitions,” said CEO Ivan Menezes. “USL is the leading player in the attractive Indian spirits market with great brands, a unique route to consumer and talented people. We can now combine that strong platform with Diageo's strengths to create a compelling future in India for Diageo, USL and the Indian spirits industry.”
The total purchase has been far more expensive than Diageo initially intended. In announcing the deal in late-2012, Diageo said it would spend US$2.05bn on 53.4% of United Spirits. The firm noted today, however, that it has cost $3.16bn for 54.78%.
Diageo will consolidate United Spirits' results from today.
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