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United Spirits confirms Diageo talks
Vijay Mallya’s United Spirits has confirmed that it is in talks with Diageo as its parent group desperately looks for funds to keep it afloat.
However, in a statement United Spirits was keen to stress that “there is no certainty that these discussions will lead to a transaction”.
The statement said: “United Spirits Limited and Diageo plc confirm that Diageo plc is in discussion with United Spirits Limited and United Breweries (Holdings) Limited in respect of possible transactions for Diageo plc to acquire an interest in United Spirits Limited.”
News that talks are going ahead has boosted the Indian group on the Bombay Stock Exchange, with prices rising to 1,098.80 rupees, up 3.6% for the day.
A 52 week high of 1,099.95 rupees was reached on Monday 24 September.
Rumours had been circulating that the UK-based drinks giant was seeking a share in the group which would help it gain access to the Indian market as well as access to the Scotch whisky stocks of Whyte & Mackay which United Spirits owns.
United Spirits is part of Mallya’s UB Group which has been struggling in recent months due to the huge losses being incurred by his Kingfisher Airlines.
The group desperately needs money, US$600m in the next two months by some estimates,if it is to survive. The unnamed contacts that reported that the two companies were in talks added that any deal was likely to take place by next month at the latest.