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.