United Spirits ends stake sale talks with Diageo
25 Aug 2009
The Vijay Mally-led United Spirits Ltd has called off stake sale talks with British spirits maker Diageo Plc after the eight-month-old talks ended in failure.
United Spirits called off talks because Diageo's offer didn't fairly value its Scottish whisky unit Whyte & Mackay, reports quoted Ravi Nedungadi, chief financial officer of the UB Group, which owns United Spirits, as saying.
Diageo, which owns famous brands such as `Johnnie Walker' whisky, had proposed to acquire a 14.9 per cent stake in United Spirits, India's largest distiller, last year in order to boost its presence in the emerging market.
United Spirits, which controls about 49 per cent of the $21 billion Indian spirits market, said it would start looking for a new strategic partner next year while Diageo said it would look at own brand potential in India.
Nedungadi, however, said United Spirits has "substantially paid" its $625 million of loans and is in no urgent need for cash.
United Spirits, the world's third-largest spirits maker by volume and Diageo is the world's largest spirits group.
Nedungadi said United Spirits is growing at 18-20 per cent annually and is well on course to emerge world No 2 firm by the end of the year.
United Spirits had earlier held talks with KKR, Blackstone and Capital International about selling a stake.