Vijay Mallya has resigned from the post of chairman and non-executive director of United Spirits, ending months of acrimonious battle with parent, the London-based Diageo.

UB Group chairman Mallya walks away from the USL board with a sweetheart deal with Diageo, which gives him $75 million spread over five years, of which about $40 million will be paid during the first year. The money is in lieu of the non-compete agreement.

The agreement has global non-compete (excluding the UK), non-interference and standstill obligations as regards the company for five years. Diageo, in turn, has agreed to drop all charges of irregularities against him.

In a statement late on Thursday, Mallya said the time had come for him to move on and end the uncertainties about his relationship with Diageo and United Spirits. “Accordingly, I am resigning my position with immediate effect. I am pleased to have been able to agree terms with Diageo and United Spirits Limited. The agreement we have reached secures my family legacy.”

Mallya will henceforth be known as Founder Emeritus. Diageo, however, clarified in a statement that this title carries no authority, responsibility, rights or benefits within the company or its group.

MK Sharma, a former vice-chairman of Hindustan Unilever and an independent non-executive director and chairman of the audit committee of USL, will be the new chairman of the board.

Sidhartha, Mallya’s son, will be a director of Royal Challengers Bangalore for two years while Mallya will hold the honorary title of chief mentor.

As part of its arrangements with Mallya, USL has entered into an agreement that also allows him or a party nominated by him to acquire up to 13 residential, non-core properties from USL.

Shriram Subramanian of InGovern, a proxy advisory firm, said the settlement is a positive for the shareholders. “Now, United Spirits can get down to its business of running its operations and build shareholder value.”

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