United Spirits has begun an assessment of its sports management unit that owns the Royal Challengers Bengaluru (RCB) franchise.
In a stock exchange filing yesterday (5 November), the Diageo-controlled company said it is reviewing the investment in its wholly owned subsidiary, Royal Challengers Sports Private Limited (RCSPL).
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The review is expected to conclude by the end of March.
RCSPL holds the RCB teams that compete in the Indian Premier League (IPL) and the Women’s Premier League.
Previously, United Spirits said reports Diageo was mulling its options for its interest in the IPL cricket team were “speculative”.
United Spirits, which sells McDowell’s No.1, Royal Challenge, and Signature-branded products, acquired its interest in RCB in 2008.
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By GlobalDataPraveen Someshwar, the managing director and CEO of United Spirits, said RCSPL is “non-core to our alcobev business”.
“This step reinforces United Spirits’ and Diageo’s commitment to continue reviewing its India enterprise portfolio to enable sustained delivery of long-term value to all its stakeholders, while keeping RCSPL’s best interest in mind,” Someshwar added.
Diageo holds just under 55.9% of United Spirits, according to the group’s annual report.
In a trading statement issued today, Diageo reported its first-quarter net sales fell by 2.2% to $4.9bn.
Gains in Europe, Latin Americam the Caribbean,and Africa were counterbalanced by weakness in Chinese white spirits and a softer-than-expected US consumer market, the group said.
Nik Jhangiani, interim CEO, said: “We are not satisfied with our current performance and are focused on what we can manage and control.”
