BullionIndia offers a new mode of buying precious metals, apart from existing options of...
The Supreme Court had expressed its displeasure that the Delhi High Court was hearing matters related with the 2G spectrum scam despite its restraining order
Vijay Mallya will continue as Chairman of United Spirits, whose major stake would be purchased by Diageo at Rs1,440 per share or for Rs11,166 crore
New Delhi: Diageo Plc, the world's largest spirits maker on Friday said it will buy a 53.4% stake in United Spirits for Rs11,166.5 crore. The multi-structured deal may provide Vijay Mallya a breather from troubles emanating from the grounded Kingfisher Airlines, reports PTI.
In a joint statement, the UK-based company said it has entered into an agreement with United Breweries (Holdings) Ltd and United Spirits Ltd (USL) to buy 27.4% stake in USL, the top liquor company in India at Rs1,440 per share or a total of Rs5,725.4 crore.
Further, Diageo will also acquire 19.3% stake in USL at Rs1,440 per share from the UBHL group, the USL Benefit Trust, Palmer Investment Group Ltd and UB Sports Management (two subsidiaries of USL) and SWEW Benefit Company (a company established for the benefit of certain USL employees).
The company will seek approval from USL shareholders for a preferential allotment to Diageo at a price of Rs1,440 per share of new shares amounting to 10% of the post-issue enlarged share capital of USL. It further said it will launch a tender offer to acquire a further 26% stake in USL at Rs1,440 per share.
"On completion of the share purchases as described above and in the event that the tender offer were fully subscribed, Diageo will hold 53.4% of the enlarged USL share capital at an aggregate cost of Rs11,166.5 crore," the company said.
Following completion of these agreements, Mallya will continue in his current role as Chairman of USL, and UBHL and he will work with Diageo to build the USL business as the current consumer trends for premiumisation accelerate in India, it added.
Kingfisher has a debt pile of over Rs7,000 crore.
Diageo Plc Chief Executive Paul S Walsh said: "The combination of USL's strong business with the capabilities which Diageo brings as the world's leading premium drinks company will ensure that USL continues to lead the industry in India."
On his part Mallya said: "I have had a long association with Diageo and therefore I am confident that this winning partnership with Diageo provides USL with the best possible platform for future growth. I am delighted to remain part of that journey as Chairman of USL as we work together to build continued value for the shareholders of USL and UBHL."