CCI, Sebi seek clarification in Diageo-USL deal
16 Jan 2013
The Competition Commission of India (CCI) has expressed reservations over the proposed Rs11,166-crore purchase of a majority stake in UB group's United Spirits Ltd, as it found certain clauses of the deal to be based on probabilities and were not definitive, PTI reported.
CCI is the second regulatory authority after market regulator Sebi to express its reservations over this deal.
CCI has reservations over the deal terms that provide for the existing promoters of United Spirits Ltd (USL) extending preferential treatment to Diageo, in the event of its failure to get the required number of shares from public shareholders through an open offer, according the report which quoted sources close to the development.
The companies have been asked by the regulator to rework the ambiguous parts and make the deal more definitive, failing which CCI could return the merger application.
At the same time, Sebi has also expressed reservations about the preferential allotment of shares to acquirers if the open offer failed to elicit a desired response from non-promoter shareholders.
The market regulator has sought fresh clarifications from global liquor giant Diageo regarding its Rs5,441 crore open offer for stake purchase in UB group's United Spirits Ltd (USL) -- a development that could further delay the closure of this deal, a separate PTI report said.