Regulator approves Diageo’s USL acquisition

Indian authorities have approved Diageo’s £1.13 billion bid to increase its controlling stake in United Spirits.

Diageo’s acquisition of United Spirits, maker of McDowell’s whisky, has moved a step closer to completion after receiving approval by Indian regulators

Market regulator Sebi cleared the open offer last week, allowing the Securities and Exchange Board of India to also approve the sale, according to the Economic Times.

Diageo, the world’s biggest drinks company, launched its tender offer last month in a bid to gain a “certainty of control”.

If the offer is fully subscribed, Diageo will own 55% of shares in Bangalore-based United Spirits, producer of the one of the world’s best selling whiskies, McDowell’s.

Diageo bought its initial shares in United Spirits at the end of 2012, but has encountered a number of hurdles in increasing its stake.

In July Diageo completed the purchase of a further 15% share of the company, taking its total interest to 25%. This was supplemented by later private share acquisitions in the same year following almost 12 months of negotiations and vying for governmental and regulatory approval in both India and the UK.

This most recent acquisition bid awaits shareholder and UK regulatory clearance before it can be completed.

Overall, Diageo would have spent £1.85 billion on its total shares in United Spirits.