Diageo takes majority of United Spirits at higher price than planned

2nd Jul 2014 11:48

Drinks giant Diageo has confirmed the purchase of a further 26% of United Spirits (USL) for £1.12bn, taking its share of India's largest liquor group to 54.78%. In 2012 Diageo said it planned to take a 53.4% stake in USL for £1.285bn, but the eventual price was 44% higher at £1.844bn after the FTSE 100 company battled through years of delays in its attempts to complete the acquisition.It expects to fully consolidate the results of USL into its own numbers from Wednesday. In the year to March 2013, USL earned net revenue of £1.05bn, earnings before interest, tax, depreciation and amortisation of £134m and lost £10.4m after tax. Chief Executive Ivan Menezes said this was a significant move for Diageo: "India has now become one of Diageo's largest markets and will be a major contributor to our growth ambitions. USL is the leading player in the attractive Indian spirits market with great brands, a unique route to consumer and talented people."We can now combine that strong platform with Diageo's strengths to create a compelling future in India for Diageo, USL and the Indian spirits industry."Shares in the company were down 0.37% to 1,895.5p at 12:05 on Wednesday.OH