Diageo eyes potential US$2bn windfall from IPL team sale
Diageo is reportedly considering the sale of its Indian Premier League (IPL) team, Royal Challengers Bangalore, in a deal that could fetch up to US$2 billion. The move comes as the world’s biggest premium spirits group looks to strengthen its balance sheet by divesting non-core assets.
The prospect of Diageo raising up to US$2 billion by selling its Indian Premier League cricket franchise, Royal Challengers Bangalore, has been revived as a hot topic in India.
The world’s biggest premium spirits group is looking to bolster its finances by disposing of non-core assets, and interim chief executive Nik Jhangiani would doubtless welcome being able to announce considerable progress towards that goal in time for next month’s annual general meeting.
RCB’s rising value after IPL triumph
RCB won the prestigious IPL crown earlier this year, enhancing the value of the franchise, which Diageo owns through its Indian subsidiary United Spirits.
It became the owner of the cricket franchise when it took a controlling stake in USL from now-fugitive former chairman Vijay Mallya in 2016.
Non-core business under review
Last month, Praveen Someshwar, MD & CEO of Diageo India, was quoted as saying by CNBC-TV18, “RCB is an exciting business, but it is non-core for Diageo.”
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The Royal Challenger brand of Indian whiskey is not Diageo’s prime local brand, and a decision to sell may be influenced by the Indian government’s plans to further tighten the ban on alcohol advertising in sports.
Speculation grows amid silence from Diageo
Although Diageo in India has declined to comment other than saying that it does not respond to speculative market rumours, the prospect of a sale of RCB has been fuelled by a recent social media post from ex-IPL commissioner Lalit Modi, who remains well connected in cricket circles.
He said on X: “There have been a lot of rumour about the sale of an IPL franchise, specifically RCB – well, in the past they have been denied. But it seems the owners have finally decided to take it off their balance sheet and sell it.”
Potential buyers emerge
Local reports have linked Serum Institute chief Adar Poonawalla as a potential bidder.
“I am sure one of the Big Global funds or a Sovereign Fund would desperately like to have them as part of their investment strategy and India strategy,” Modi added.
“There can be no better investment opportunity I could think of than this one. Good luck to whoever can get their hands on it. It will set a new record valuation, which will just go to show that IPL is not only the fastest growing Global Sporting league but also the most valuable,” he concluded.
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