Diageo buy controlling stake in United Spirits
The article below was posted on scotsman.com this morning, reporting that United Spirits have agreed a 1.3 billion deal to sell 27.4% stake in their company. What does this mean for the whisky industry? Business as usual, is it right or wrong that one company can control so much of the industry? Does this make a difference at all? Below is what the Scotsman reported this morning... Diageo, Scotland largest distiller has agreed a £1.3 billion deal to take a majority stake in United Spirits, the Indian drinks giant that owns Whyte & Mackay. Vijay Mallya, who will continue as chairman of United Spirits following the deal, will sell a 27.4 per cent stake for £660 million, with the purchase triggering a mandatory tender offer for a further 26 per cent stake from other shareholders. The long-awaited deal – which is the largest Indian merger and acquisition deal since Edinburgh-based oil explorer Cairn Energy sold a controlling stake in its Cairn India subsidiary to FTSE 100 mining giant Vedanta Resources – follows a “will-they, won’t they” relationship that has gone on since 2008. Paul Walsh – chief executive at Diageo, which makes Bell’s, J&B and Johnnie Walker – said: “I am delighted at the opportunity Diageo has to be part of India’s large and growing local spirits market. “Vijay Mallya’s experience in building United Spirits to the leadership position it has is unique in our industry and in his position, as chairman, I look forward to working with him to deliver value for the shareholders of both United Spirits and Diageo.” Mallya added: “I am very proud of United Spirits and what has been created over the past 30 years to bring this company to its pre-eminent position in India. I have had a long association with Diageo and therefore I am confident that this winning partnership with Diageo provides United Spirits with the best possible platform for future growth.” The pair is also to set up a joint venture to run a beer business in South Africa. To read the full article click here. To buy rare whisky click here.