Diageo plc Likely To Buy 25% Stake In United Spirits Ltd-The Economic Times

The Economic Times reported that Diageo plc is close to acquiring 25% stake in Vijay Mallya-controlled United Spirits. A formal announcement of the deal is likely to happen in two days. Diageo will have to make an open offer to acquire a controlling 51% stake in USL. The deal is likely to be struck at a price of INR1,300-1,500 per share. As per the terms of the transaction, Mallya will sell 12% to Diageo and follow it up by buying the treasury stock of the company owned by a trust. USL will then make a preferential allotment to Diageo, giving the British giant a 25% stake. This will be followed by an open offer to minority shareholders. Mallya will hold around 15% in the company, post deal. In a rare joint statement on September 26, Diageo and United Spirits said that Diageo is in talks with USL and UB Holdings for a possible investment in USL. People close to the development said that legal firms — Amarchand & Mangaldas for USL and Platinum Partners for Diageo —are drafting the documents.