E-Malt. E-Malt.com News article: UK & India: Diageo close to completing the acquisition of the majority stake in United Spirits

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E-Malt.com News article: UK & India: Diageo close to completing the acquisition of the majority stake in United Spirits
Whisky news

UK drinks group Diageo's $2.1 billion deal to acquire a majority stake in Vijay Mallya promoted United Spirits is in the last lap of completion, NDTV cited undisclosed sources on July, 4. Two of the three stages of the deal, announced in November 2012, have already been completed, the sources added.

Diageo's Rs. 5,441-crore open offer for acquiring 26 per cent stake in United Spirits elicited a tepid response from investors because the tender price of Rs. 1,440 per piece was much lower than the market price.

Of 3.8 crore shares of United Spirits that were on offer, shareholders tendered just 64,169 shares and only 58,688 shares were accepted, according to a regulatory filing. The open offer began on April 10 and closed on April 26.

Diageo's failure to buy outright control of United Spirits through the open offer will, however, not impact the company's control over management. That's because under deal terms announced in November, Mr Mallya's United Breweries Holdings, which owns a United Spirits stake, would vote with Diageo on decisions for four years.

The second stage was completed in the last week of May. United Spirits approved the allotment of 14.5 million shares on a preferential (at Rs. 1,440 per share) basis to a wholly owned unit of Diageo Plc, as part of the stake sale deal announced in November.

The third step, likely to be completed in a few days, involves the transfer of shares (including treasury stock) from UB Group.

Post the completion of the deal, Diageo will own 27 per cent stake in United Spirits. Diageo executives will get seats on the USL board once the deal is done.


04 July, 2013

   
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