Diageo subsidiary pockets £1.3bn from sale of Indian cricket team
A subsidiary of Diageo has pocketed £1.3bn from the sale of its Indian cricket team as the drinks giant divests assets to focus on its core business.
The FTSE 100 firm acquired Indian team Royal Challengers just over a decade ago as part of its acquisition of a majority stake in United Spirits, an Indian drinks business behind a number of popular local whisky, wine, vodka and brandy brands.
Diageo has quietly kept the club in its portfolio ever since – but new boss “Drastic” Dave Lewis has been on the look out to cut the fat from the business, including the disposal of non-core assets.
The club has been acquired by a consortium of investors including Aditya Birla Group, The Times of India Group, Bolt Ventures, and private equity giant Blackstone.
Diageo shares rose 1.3 per cent to 1,380 following news of the sale. The stock remains down by more than 10 per cent since the start of the year.
Trying times
Last month Diageo slashed its dividend as the cost-cutting regime of new chief executive Dave Lewis begins to take hold, prompting a share price spook.
The board announced the “difficult” decision to cut its dividend to 20 cents to “accelerate the strengthening” of its balance sheet in its interim results, the first financial update since Sir Dave Lewis took charge.
Diageo’s new boss said consumers are opting to have fewer drinks each time they indulge.
He said: “These fewer serves per occasion point to a pressure in the economics that our consumer groups are facing.”
“What you see is a very significant squeeze on disposable income,” he added.
The firm’s share price fell by as much as 14.7 per cent on Wednesday, dragging the stock down to a 0.5 per cent lower than its level at the start of the year.
The FTSE 100 giant, which also owns spirit brands Smirnoff, Johnnie Walker and Captain Morgans, has suffered from tight margins in recent years as consumers turn to low alcohol alternatives and cheaper brands.
The dividend cut comes as Diageo underperformed analyst expectations, notching a four per cent drop in sales – heftier than the three per cent forecast – in the six months to December 2025.