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Diageo reviewing collaboration with United Spirits: report

Diageo reviewing collaboration with United Spirits: report
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First Published: Thu, Nov 13 2008. 05 10 PM IST
Updated: Thu, Nov 13 2008. 05 10 PM IST
By Reuters
London: Diageo Plc, an alcoholic drinks group, said it was reviewing a possible collaboration with India’s United Spirits Ltd after Indian media reported about Diageo taking a stake.
“We are reviewing a possible collaboration with United Spirits,” said a Diageo spokesman on Thursday.
Market talk that Diageo, the maker of Johnnie Walker whisky and Smirnoff vodka, may take a minority stake in United Spirits has continued for a while with European drinks makers keen to increase their presence in India’s fast-growing drinks market.
Earlier, the Economic Times in India reported that Diageo was in exclusive talks to buy a minority stake of 14.99%, initially. The same paper reported a year ago that Diageo was in talks to buy a slightly smaller stake.
United Spirits is the world’s No. 3 spirits maker by volume and is controlled by Vijay Mallya through the UB Group.
“There was a meeting with Diageo yesterday. We have entered into exclusive discussions with them for a limited period,” Mallya told the Indian paper.
The paper, citing unnamed sources, said United Spirits was seeking to price the deal at almost double Wednesday’s closing share price of Rs771.1, with the stake sale raising $450 million to $500 million.
The proceeds could be used to reduce United’s debt of $1.2 billion from its purchase of Scottish spirits maker Whyte & Mackay in 2007, it added.
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First Published: Thu, Nov 13 2008. 05 10 PM IST
More Topics: Diageo | India | Johnny Walker | spirits | Kingfisher |