UK major chief to meet Mallya to sort out United Spirits takeover deal
Ivan Menezes, CEO of Diageo Plc, is expected to shortly meet the promoter of United Spirits Ltd, Vijay Mallya, and its top management to take forward the United Spirits-Diageo deal . The proposed meeting, in Goa, comes following a meeting in which the Competition Commission of India sought additional details on the deal.
The UK liquor major Diageo signed an agreement to buy a majority stake in the Mallya group firm United Spirits Ltd, for about $2 billion.
In a two-hour meeting on Monday, Diageo is understood to have presented information on the deal to the CCI. The deal needs the commission’s nod.
“The data regarding the deal is complicated. Diageo has submitted its replies. The CCI has sought some additional details which will be presented before the Commission tomorrow,” a CCI official said.
Although the companies have responded to the initial queries raised by the Commission, in the second stage of scrutiny the CCI sought more information.
The Commission had earlier asked the companies to rework the ambiguous parts and make the deal more “definitive” in nature. The CCI had also asked the companies to provide key information including prices and market share of the Diageo and its products vis-à-vis its rivals.
As part of the deal, Diageo would acquire 27.4 per cent stake for Rs 5,725.4 crore through a combination of share purchase from existing promoters and preferential allotment of shares. In addition, it had offered to acquire an additional 26 per cent stake for Rs 5,441.07 crore through an open offer for public shareholders.
The CCI had earlier said that it was not comfortable with the deal terms that provided for the existing promoters of United Spirits Ltd giving a preferential treatment to Diageo, if it fails to get the required number of shares from public shareholders through an open offer.