Diageo to pay over $2 billion for United Spirits stake

Last Updated: Fri, Nov 09, 2012 09:33 hrs
Force India team principal Vijay Mallya waves in the paddock during the third practice session of the Indian F1 Grand Prix at the Buddh International Circuit in Greater Noida

Diageo Plc has agreed to buy a 53.4 percent stake in Indian liquor baron Vijay Mallya's United Spirits Ltd for more than $2 billion, according to an internal memo related to the deal obtained by Reuters.

The purchase marks the biggest inbound Indian M&A deal since British oil firm Cairn Energy Plc's agreed to sell a majority stake in its Indian business to Vedanta Resources Plc last year. The Diageo deal concludes an on-again, off-again courtship that began in 2008.

The purchase would ramp up Diageo's presence in the world's largest whisky market, while Mallya will gain much-needed cash to reduce United Spirit's debt although it may not be enough to revive his grounded Kingfisher Airlines Ltd .

The two companies said in September that they were in talks about a possible deal.

More from Sify: