INDIA: Diageo nears United Spirits majority control
Diageo is expected to finally take majority control of United Spirits
Diageo is hoping to confirm early next month that it has secured majority control of India's United Spirits after it has verified the amount of public shares it has acquired from a second open offer.
The deadline for the offer passed yesterday (19 June) in which the London-headquartered group was looking to acquire up to 37.8m more shares in the firm. If the take-up and acceptance of shares is agreed, Diageo will have a 54.78% stake in India's largest spirits company.
The Smirnoff producer is currently in the process of scrutinising and vertifying the shares that have been tendered, just-drinks understands. A final announcement is expected in “early July” on how many shares have been secured, a source close to the situation said.
Diageo will have paid INR180.2bn (US$3.1bn) in total for its stake in the firm, at a multiple of 38-times United Spirits' EBITDA.
Diageo became the biggest shareholder in United Spirits last July, when it upped its stake to 25% through a share purchase agreement, after an initial deal was struck in November 2012. The latest tender offer opened on 6 June.
If Diageo gains majority control, it will bring to an end a lengthy episode involving the firm's efforts to gain a significant stake in United Spirits, a subsidiary of the Vijay Mallaya-controlled UB Group. The UK firm is keen to exploit United Spirits' domination of alcohol distribution in the emerging market of India.
Earlier this week, United Spirits said it was delaying the reporting of its full-year results due to problems with debtors and an outstanding loan.
Shares in United Spirits are currently trading up 4.39% at INR2,702.95 on the Bombay Stock Exchange.
The clamour in recent years to enter the Irish whiskey category suggests that the segment is poised to become the next big thing. But, with one brand dominating the sector massively, are the prospects...
The world’s leading spirits producer, Diageo also ranks 23rd in the global wine market. This profile analyses the challenges faced by Diageo’s wine operations, which sit uncomfortably with the company...
Analyses of the leading companies in the alcohol industry...
Spirits in Global industry profile provides top-line qualitative and quantitative summary information including: market size (value and volume 2009-13, and forecast to 2018). The profile also contains...
Spirits in Australia industry profile provides top-line qualitative and quantitative summary information including: market size (value and volume 2009-13, and forecast to 2018). The profile also conta...
- Craft spirits shake-out will be just the beginning
- How Treasury is rewriting the rule book - Comment
- The decline of the flagship beer brand - Comment
- Drinkable yogurt - The next drinks opportunity
- Coca-Cola India suspends bottling operations
- Diageo brands need "fixing and nurturing" - TWE
- Diageo revamps Gordon's gin bottle in UK
- SAB shareholders granted AB InBev vote split
- Craft Brew Alliance poised for AB InBev takeover?
- Diageo's Guinness Rye Pale Ale - NPD
- The Next Seven Big Beverage Markets
- Global rum insights - market forecasts, product innovation and consumer trends
- Carlsberg AS (CARL B) - Financial and Strategic SWOT Analysis Review
- Global RTD insights - market forecasts, product innovation and consumer trends
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages