Wed, Apr 16, 2014 - Page 15 News List

Diageo makes offer for control of United Spirits


Diageo has launched an offer to take control of Indian whisky maker United Spirits Limited (USL) as the British drinks giant chases expansion in emerging markets, it said yesterday.

Diageo, which already owns 28.78 percent of USL, is offering to buy an extra stake of up to 26 percent, for £1.13 billion (US$1.9 billion), it said in a statement.

The amount of shares involved could total 37,785,214.

The offer, pitched at 3,030 rupees per share, would lift its total holding in India’s top spirits maker to 54.78 percent.

Diageo is the world’s biggest producer of alcoholic drinks, making well-known brands that include Baileys liqueur, Captain Morgan rum and Guinness stout.

The London-listed group, which also makes Johnnie Walker whiskey and Smirnoff vodka, tied up with United Spirits in 2012 to give it a dominant presence in the world’s biggest whisky market.

However, that deal has been fraught by regulatory and other hurdles.

Diageo is the latest British company seeking to expand in India, the world’s second-most populous country and home to a fast-growing middle class.

Earlier this year, mobile phone group Vodafone took full control of its Indian subsidiary, Vodafone India Limited, in deals worth £1 billion.

Meanwhile, Italian drinks company Campari yesterday announced it was buying the owner of the Averna digestif brand in a 103.75 million euro (US$143.34 million) deal and said it hoped for a boost from new trends in the US.

“With the purchase of the Averna Group we are continuing to improve our portfolio of premium products,” Campari chief executive Bob Kunze-Concewitz said in a statement.

Family-owned Fratelli Averna, which is based in Sicily and was founded in the 19th century, also produces the Limoncetta and Grappa Frattina spirits brands.

The company’s net revenue rose 3.1 percent to 61.8 million euros last year and it exported 35 percent of its production, mainly to Austria and Germany.

Campari said the purchase would enable it to generate a “critical mass” on the German market, but also aid the “potential for growth” in the US, profiting from a trend of mixologist barmen using Italian spirits.

“There is growing interest from mixologists and US consumers for Italian amari and liqueurs,” it said.

The Averna family said the purchase would “strengthen the process of internationalization that we have begun in ever more complex and competitive foreign markets.”

Campari last month announced the purchase of Canadian whisky maker Forty Creek for 120.5 million euros.

The Italian company, which owns about 50 brands, including Skyy vodka and Glen Grant whisky, and distributes in 190 countries, was ranked sixth in a report on the global beverage industry last month.

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