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....
Collecting wine is big business – and so is faking it. So, how do you tell your Chateau Lafite from your Chateau La Counterfeit?...
Here in London, the second Wine Week has kicked off to coincide with UK wine trade event London Wine Fair. ...
Commuting in London is a drag. It’s overcrowded, sweaty and rarely goes to plan. In fact, it’s enough to turn a person to drink....
- SABMiller & Meantime: Notes for the New Owner
- Are Coca-Cola, A-B InBev at a FIFA Crossroads?
- Focus - The Prosecco shortage that isn't
- Comment - How to Target Cognac's Mok Generation?
- Interview - Illva Saronno CEO Augusto Reina
- Whyte & Mackay takes on Flor de Caña in UK
- Diageo takes Baileys, Gordon's marketing in-house
- Carlsberg cuts 180 staff
- Suntory to buy Japan Tobacco beverage unit
- Mixto Tequila poised for "golden age"
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Africa: The Final Frontier for Beer
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- Global rum insights - market forecasts, product innovation and consumer trends research
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review