Blog: Diageo ends United Spirits intrigue
Olly Wehring | 25 August 2009
Diageo has put an end to speculation that it may invest in United Spirits (USL), at least for now.
It has been apparent to just-drinks, as I'm sure it will have been to several others following the situation, that talks between the two companies were not going swimmingly.
There have been suggestions from the Diageo camp that Mallya and co were not that easy to deal with. Sources diplomatically described the progress of talks as "slow" earlier this year, although both Diageo and USL maintained that the dialogue was still open.
Now, the game is up. The main barriers - the size of Diageo's stake and the amount of investment required by USL - have proven insurmountable.
Well, they have for now. On the face of it, some kind of tie-up still looks like a decent bet for the future.
India is one the world's largest countries, with a strongly emerging economy and a growing thirst for spirits. USL controls around two thirds of the market and, as part of Vijay Mallya's UB Group, has the biggest distribution network in the country's drinks sector.
Diageo, as the world's largest spirits firm, naturally wants a piece of that market. Its current joint-venture in India with Radico Khaitan has a spirits market share of around 10% - hardly enough for the world's leading spirits player.
However, exciting as India may be as a market prospect, it is early days. There is plenty of time for round two.
United Spirits, meanwhile, has its short-term sights fixed on securing private equity investment.
The long-running discussions between Diageo and United Spirits over a possible stake purchase have collapsed, with Diageo walking away from the table....
This week, Diageo held a UK semi-final for its global World Class cocktail competition. ...
The rules have changed. The goal posts have... gone? ...
Would the thought of working in a morgue stop you from drink driving? ...
- Paddy Irish whiskey - The Facts
- A-B InBev and its SABMiller divestments - Focus
- SABMiller in Cent'l & E Europe - What is for sale?
- Is single malt the Great White Hope for Scotch?
- Is the wine industry confusing its consumers?
- Pernod Ricard to widen Our/Vodka sales reach
- Leonardo DiCaprio joins Runa drinks board
- Remy Cointreau names new Travel Retail exec
- Pernod in talks to sell Paddy whiskey to Sazerac
- US wholesalers point to Absolut decline - report
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global travel retail insights - market forecasts, product innovation and consumer trends
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- Carbonates in India
- Consumer and Market Insights: Spirits Market in the US