Diageo completes share purchase with UBHL

Diageo is now the major shareholder in United Spirits Limited (USL), the leading Indian spirits company, with a shareholding of 25.02%.

The acquisition by Diageo of a further 14.98% stake in USL was completed today for a total sum of £344,190,791.

With completion of the Share Purchase Agreement, the Shareholders’ Agreement between Diageo, United Breweries (Holdings) Limited and KFinvest is now effective.  Diageo’s 25.02% shareholding in USL, together with the voting and other governance arrangements agreed with the UBHL group, including Dr Mallya’s continued role as chairman of USL, will give Diageo control and enable Diageo to fully reflect the results of USL in its consolidated accounts, which it expects to do from 1 January 2014.  Prior to this, Diageo will equity account its shareholding in USL.

Ivan Menezes (pictured), chief executive of Diageo, said: “USL’s strong market-leading position combined with Diageo’s strength and capabilities opens an exciting and important new chapter for Diageo in the attractive Indian spirits market. Since we received approval for this transaction we have been getting ready for closing and integration. Having completed the share purchase, we will now begin the work to identify and capture the significant growth opportunities within this attractive market.

“Through this acquisition we have transformed Diageo’s position in India, a market which is one of the biggest growth opportunities in our industry. India will become one of Diageo’s largest markets and with its increasing number of middle class consumers looking for premium and prestige local spirits brands as income levels rise it will also become a major contributor to our growth ambitions.”

Dr Vijay Mallya, chairman of the UB Group, said: “I am very pleased that we have completed our Share Purchase Agreement today. USL has entered into the next stage on its journey and I look forward to remaining part of that journey in my role as Chairman of USL.”

Pictured above: Key brands in USL's portfolio

 

4 July 2013 - Felicity Murray