Diageo offers 1.1bn pounds to gain United Spirits majority stake

15th Apr 2014 07:17

Diageo, the maker of Gunness, Baileys and Smirnoff, has offered 1.1bn pounds to take a majority stake in Indian alcoholic beverages group United Spirits (USL).The UK-listed company has launched a tender offer for up to 26% of USL, India's largest 'alcobev' company with over 140 brands, lifting its 28.78% stake to 54.78%.Diageo said it would acquire up to 37.79m USL shares at a price of INR3,030 each for a total of INR114.50bn, equal to £1.13bn. This is a 22.5% premium to the price at which Diageo last acquired USL shares in January.USL enjoys a 59% market share for its top brands in India and sold nearly 124m cases in its last financial year.Diageo said that if the tender offer is subscribed in full, the total consideration payable for the increased stake will be valued at 38 times USL's operating profits.BC