Diageo has confirmed the completion of its latest tender offer for shares in United Spirits and is now the majority controller of the Indian firm.
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.
Sectors: Emerging markets – BRIC, Mergers & acquisitions, Spirits
Companies: Diageo, United Spirits Limited
