×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Diageo’s talks to buy United Spirits stake collapse

Diageo’s talks to buy United Spirits stake collapse
Comment E-mail Print Share
First Published: Wed, Aug 26 2009. 12 27 AM IST

Value issues: United Spirits chairman Vijay Mallya. Rajkumar / Mint
Value issues: United Spirits chairman Vijay Mallya. Rajkumar / Mint
Updated: Wed, Aug 26 2009. 12 27 AM IST
London/New Delhi: Diageo Plc.’s eight-month-old talks to buy a minority stake in India’s United Spirits Ltd collapsed after the liquor makers failed to agree on valuation.
Value issues: United Spirits chairman Vijay Mallya. Rajkumar / Mint
Bangalore-based United Spirits called off the discussions because Diageo’s offer didn’t fairly value the owner of Scottish whisky maker Whyte and Mackay, Ravi Nedungadi, chief financial officer of parent company UB Group, said over the phone on Tuesday. Diageo said in an emailed statement that it was unable to resolve points of difference, mostly linked to valuation.
The London-based maker of Johnnie Walker whisky began discussions to acquire a 14.9% holding in India’s largest distiller last year in an effort to boost its presence in a country where rising personal wealth is fuelling alcohol consumption.
Diageo said on Tuesday it will pursue the potential it sees for its brands in India separately from United Spirits.
United Spirits, which controls around 49% of the $21 billion (around Rs1.02 trillion) Indian spirits market, said it will start looking for a new strategic partner next year.
The company’s shares fell 56% last year on concern over its ability to repay debt.
“There was an economic meltdown and company valuations got hit,” Nedungadi said. “We thought the best strategy would to be to wait for some time.” United Spirits has substantially paid its $625 million of loans and has no need to sell a stake for less than what it considers to be its true value, Nedungadi said.
United Spirits chairman Vijay Mallya has business interests in liquor and aviation and is also a member of Parliament.
feedback@livemint.com
Comment E-mail Print Share
First Published: Wed, Aug 26 2009. 12 27 AM IST