UB may sell bigger chunk to Diageo

Indian liquor baron Vijay Mallya has said he is open to selling all but a majority stake in United Spirits, the flagship company of his UB group, as talks continue with Diageo, the world's largest spirits manufacturer.

"I am very comfortable with any level of shareholding that a strategic investor such as Diego may wish to have in United Spirits Ltd (USL), as long as their total equity does not exceed the promoter holding," the UB group chairman told the media.

His statement comes in the midst of reports that Diego, which owns popular brands like Johnnie Walker whiskey and Smirnoff vodka, wants a bigger slice of USL than the 14.9 per cent that was earlier offered. UB group, the promoter of USL, has about a 38 per cent stake in that entity, which will drop marginally to 34 per cent when its ongoing merger with Shaw Wallace & Co is completed.

Mallya and a team from his company, including UB Group CFO Ravi Nedungadi, USL president and MD Vijay Rekhi, and USL CFO P A Murali, held a meeting with their Diageo counterparts in New York last month over the stake sale.

"There is no stress or strain in my discussions with Diageo. The talks are progressing in a mutually agreed manner," Mallya said, while declining to disclose details.

USL has 17.2 per cent of treasury stock which resulted from the merger of its company McDowell & Co with Herbertsons; and this is now being held in a trust.

Significantly, Mallya's son Siddharth recently joined Diageo's London office as a management trainee.