Mumbai/Bangalore, Sep 25 (IANS) The Vijay Mallya-led liquor firm United Spirits is likely to sell stakes to UK-based Diageo Plc, the world's largest distiller, the two companies said in a statement.
"United Spirits Limited and Diageo plc confirm that Diageo plc is in discussion with United Spirits Limited and United Breweries (Holdings) Limited in respect of possible transactions for Diageo plc to acquire an interest in United Spirits Limited," a statement issued jointly by the two companies said.
"However, there is no certainty that these discussions will lead to a transaction," it said.
Talking to reporters on the sidelines of the company's annual general meeting in Bangalore, United Spirits chairman Mallya also confirmed that the two companies were in talks but said there was no certainty of the transaction.
"This is at discussion stage and there is no certainty that transaction will take place. I will say nothing more, nothing less," Mallya said.
Share price of United Spirits surged almost three percent on the stake sale buzz.
United Spirits was trading 2.69 percent higher at Rs.1,082.40 at the Bombay Stock Exchange (BSE) in late afternoon trade, after touching an intra-day high of Rs.1,098.80.
The announcement came at a time when Mallya-led firms, notably Kingfisher Airlines, are reeling under huge financial troubles.
Declining to elaborate on the talks with the world's largest spirits firm by value, Mallya said the shareholders had been informed about the discussions at the Annual General Meeting (AGM) and all resolutions on the agenda have been passed unanimously.
"If I have anything more to say at any time in future, I will comply with all legal and statutory requirements. The statement we have issued earlier in the day is self-explanatory. I am not prepared to go beyond that," Mallya said.
As the world's number one firm by volume, United Spirits exports a range of liquor brands to 37 countries and commands over 50 percent market share in India.
Among the leading brands of United Spirits are Royal Challenge, Bagpiper Whisky, Director's Special and Gilbey's Green Label.
With presence in about 180 countries, Diageo accounts for 25 percent of the value of top 100 brands worldwide.
Johnnie Walker whisky and Smirnoff Vodka are the two leading brands of Diageo.