UK drinks giant Diageo has completed a deal to make it the majority shareholder in Indian group United Spirits (USL) following two attempts to secure a controlling interest.
The acquisition gives Diageo a 55 per cent stake in the company at a cost of £1.1bn.
“Our announcement is significant for Diageo,” Ivan Menezes, the chief executive of Diageo, said yesterday.
“India has now become one of Diageo’s largest markets and will be a major contributor to our growth ambitions. USL is the leading player in the attractive Indian spirits market with great brands, a unique route to consumer and talented people.
“We can now combine that strong platform with Diageo’s strengths to create a compelling future in India for Diageo, USL and the Indian spirits industry.”
The acquisition of 37,785,214 shares by Diageo yesterday concluded a process begun by the company in mid-April. The FTSE 100 firm previously tried to buy up shares in late 2012, but USL investors proved reluctant to sell out at the time.
The Indian spirits market is booming, driven by demand for high-end brands and particularly whisky.
United Spirits is controlled by billionaire Vijay Mallya and produces the world’s second best selling whisky brand, McDowell’s No.1. The deal means that combined, Diageo and United Spirits now oversee over 30 per cent of total global whisky volumes.
Shares in Diageo fell 0.29 per cent at market close yesterday. Shares in United were up 2.76 per cent on the news yesterday.