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Diageo PLC Announces Completion Of United Spirits Ltd Share Purchase Agreement With UBHL


Thursday, 4 Jul 2013 09:02am EDT 

Diageo PLC announced that it has completed the acquisition of a further 14.98% stake in United Spirits Limited (USL), the leading spirits company in India. The consideration was INR1440 per share and the total consideration of INR31,345,558,560 (GBP344,190,791) has been settled . On 27 May 2013 Diageo subscribed for a preferential allotment of new shares in USL amounting to 10% of the post-issue enlarged share capital at a total consideration of INR 20,927,196,000 (GBP249,255,052). Separately, Diageo acquired 58,668 additional USL shares in the Tender Offer for a total consideration of INR 85,778,082 (GBP983,789). Diageo therefore now holds 36,359,192 shares representing 25.02% of the enlarged USL share capital at an aggregate cost of INR 52,358,532,642 (approximately GBP594,429,632). This represents a 18x multiple of USL's EBITDA for the year ended 31 March 2013 and the transaction is expected to be eps accretive in year 2 and economic profit positive in year 5 assuming a 12% WACC. Diageo has acquired shares from UBHL, KFinvest (a subsidiary of UBHL), Palmer Investment Group Limited and UB Sports Management Overseas Limited (two subsidiaries of USL) and SWEW Benefit Company (a company established for the benefit of certain USL employees). 

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