Brazilian billionaire mulling bid for Diageo: report
06 Jun 2015
Global liquor major Diageo PLC, which acquired a majority 55 per cent equity stake in United Spirits, India's largest liquor company, is itself under takeover threat from Brazilian billionaire Jorge Paulo Lemann and his partners in private equity firm 3G Capital, reports said.
Brazilian billionaire Jorge Paulo Lemann and his partners in private equity firm 3G Capital are looking to bid for Diageo PLC, the world's largest producer of spirits, according to a report in the Brazilian newsweekly Veja, Reuters reported.
According to the report, which appeared in its Radar column, the richest man in Brazil, and partners Marcel Telles and Beto Sicupira, were in the initial stages of studying a buyout offer for Diageo.
US-listed shares of Diageo shot up 8.7 per cent on the report, closing at $118.0 in heavy trading, the biggest gain in six-and-a-half years.
London-based Diageo owns some of the world's leading beverage brands, including Johnnie Walker whisky, Smirnoff vodka, Tanqueray gin, Don Julio tequila and Guinness beer.
Lemann had embarked on a shopping spree in recent years that included acquiring Burger King from Diageo in 2010 and buying HJ Heinz Co in 2013 in partnership with US billionaire Warren Buffett.
3G Capital, with links to Warren Buffett's Berkshire Hathaway, had already been tied to deals in the drinks sector this year.
Last month shares in Peroni and Grolsch maker SABMiller vaulted on reports 3G Capital was teaming up with Buffett and Anheuser-Busch InBev for a takeover approach.
Lemann and Buffett teamed up in 2013 to buy Heinz, and in March the pair unveiled a merger of the ketchup maker with Kraft.
In April, Diageo saw net sales in the three months to 31 March fall 0.7 per cent on weakening global demand and the after-effects of a weak economic recovery.