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Diageo officially gains control of United Spirits
Diageo has officially confirmed its £1.1 billion tender offer to acquire a majority shareholding in United Spirits has been completed, making India one of the group’s “largest markets”.
Diageo has officially announced its acquisition of a majority stake in United Spirits
The UK drinks group has been seeking to increase its stake in India’s United Spirits – the world’s biggest spirits producer by volume – since 2012, encountering a number of setbacks.
Diageo first announced its latest offer to acquire 3.7m shares in USL in April this year through its Relay BV subsidiary.
The group now officially owns an additional 26% of USL’s shares, taking its complete stake to 55%.
Euromonitor analysts recently said that this acquisition has given Diageo an “unassailable” position as the world’s largest spirits producer by volume, giving it over 9% of global spirits volumes.
Combined, United Spirits and Diageo will command over 30% of total global whisky volumes, around 17% for rum, almost 10% for vodka and brandy, and 15% for gin.
Euromonitor analysts also said that the acquisition would “completely change” the geographic profile of Diageo’s key markets, with greater focus on the emerging markets in volume terms.
“Our announcement today is significant for Diageo,” said Ivan Menezes, CEO of 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.”
United Spirits produces the world’s second best selling whisky brand McDowell’s No.1.
Amid competition concerns raised by the UK’s Office of Fair Trading (OFT) over USL’s Whyte & Mackay Scotch whisky business and Diageo’s own blended label Bell’s, United Spirits chairman Vijay Mallay sold the brand to Emperador for £430m.