Diageo Plc completes stake purchase in United Spirits, gets only 25.02 pc - Economic ...

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Diageo Plc completes stake purchase in United Spirits, gets only 25.02 pc
Biswajit Baruah, ET Bureau Jul 5, 2013, 02.26AM IST

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MUMBAI: British spirits maker Diageo PLC has raised its stake in India's largest spirits maker United Spirits to 25% and have appointed five directors on the board chaired by liquor baron Vijay Mallya. United Breweries Holdings, the holding company of UB Group, and some companies owned by Mallya have sold roughly 15% in United Spirits (USL) to Diageo for Rs 3,135 crore.

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"USL's strong market-leading position combined with Diageo's strength and capabilities opens an exciting and important new chapter for Diageo in the attractive Indian spirits market,'' Ivan Menezes, chief executive Diageo, said after completing the transaction on Thursday. Diageo has so far spent Rs5,235 crore to own about half the stake it targeted in November last when it entered into an agreement with Mallya to buy 53.4% stake in United Spirits for Rs11,166 crore by first purchasing a 27.4% stake directly from Mallya and 26% through an open offer. "Having completed the share purchase, we will now begin the work to identify and capture the significant growth opportunities within this attractive market," Menezes said. Diageo has nominated Gilbert Ghostine and Ravi Rajagopal as non-executive directors and PA Murali as chief financial officer and executive director. Other new non-executive directors include Arun Gandhi, Sudhakar Rao, D Sivanandhan and Renu Kamad. Vijay Mallya will continue as non-executive director and chairman of United Spirits and Ashok Capoor will continue as CEO. "USL has entered into the next stage on its journey and I look forward to remaining part of that journey in my role as chairman of USL," Mallya said in a statement. In May, the British company had purchased 10% stake for Rs2,092 crore by subscribing to preferential shares. The open offer, however, fell way short of target with investors selling just 58,688 shares, or 0.4%, after USL shares rose sharply over the offer price of Rs 1,440 a piece. On Thursday, USL shares closed atRs 2,550.
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Diageo to buy 53.4% stake in Vijay Mallya's United Spirits...

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http://articles.economictimes.indiatimes.com/2013-07-05/news/40372490_1_usl-shares... 7/14/2013