Diageo increases stake in United Spirits
Johnnie Walker owner Diageo has increased its shareholding in United Spirits to 55.9% as part of the firm’s long-term premiumisation strategy in India.
Diageo first acquired a controlling stake in Bangalore-based United Spirits Limited (USL) in 2014. In August last year, the drinks giant upped its shareholding to 55.2% following a US$27.3 million investment.
In December 2019, United Spirits announced it would merge with its Pioneer Distilleries subsidiary after the move was approved by the board of directors.
Diageo’s shareholding in USL was revised to 55.18% from 55.2% following the move, which is subject to statutory and shareholder approval.
The UK-based firm has now purchased a further 5,075,000 shares (around 0.70% shareholding) in USL from the National Stock Exchange of India.
Diageo paid a per-share price of 693.25 Indian rupees (US$9.51) for the new shares.
The group said that India “remains one of the most exciting growth markets in the world” for alcoholic beverages.
During the final six months of 2019, Diageo’s net sales in India increased 2%, “primarily impacted by a broad-based consumption slowdown, and partly hampered by both a temporary supply chain disruption in the first quarter as well as liquidity challenges in certain key markets for Scotch”.
Diageo’s ‘prestige-and-above’ segment in the market rose by 5%, driven by blended Scotch whiskies Johnnie Walker and Black & White. The growth was led by a “solid performance” from Indian whisky McDowell’s No.1, which was “enhanced by the continued success” of its Platinum range. Net sales of ‘popular brands’ fell by 4%.